1988 (5) TMI 31

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....stance of the Revenue, to answer the following question of law: "Whether, on the facts and in the circumstances of the case, the Tribunal was justified in deleting the disallowance of interest of Rs. 2,125 made under section 40(b) of the Income-tax Act, 1961 ?" The relevant assessment year is 1978-79. One Kishanlal was a partner in his individual capacity in the assessee firm, Kishanlal & Br....

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....Kishanlal was a partner in the assessee-firm only in his individual capacity and not in his representative capacity as karta of the Hindu undivided family. Aggrieved by this view taken by the Tribunal, the Revenue has come up by reference under section 256(1) of the Act to this court. In our opinion, the point involved for decision in the above question is concluded by the decision in D. B. Inc....

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....in which the person is a partner in the assessee-firm. Following that decision, it must, be held in the present case that the payment of interest to the Hindu undivided family represented by Kishanlal as its karta was not payment of that amount to a partner of the firm since Kishanlal was a partner of the assessee-firm only in his individual capacity and not also in his representative capacity as ....