1986 (6) TMI 9

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....ETTY, Actg. C.J -This is a reference under section 256(1) of the Income-tax Act, 1961. The Tribunal has referred the following question: " Whether, on the facts and in the circumstances of the case, the Appellate Tribunal was right in law in upholding the Commissioner of Income-tax (Appeals) decision who held that only interest of Rs. 2,181 has to be disallowed as against Rs. 6,954 added by the....

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....y the firm, viz., Rs. 6,954 should be disallowed. So far as the sum of Rs. 9,135 paid by the partner to the assessee-firm was concerned, he held that it constituted income of the firm. The assessee challenged the assessment order before the Commissioner (Appeals). The Commissioner held that the Income-tax Officer was not justified in adding the gross amount of Rs. 6,954 paid as interest to the ....

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....the view taken by the Tribunal is correct. The answer to the question does not present any problem in view of the circular instructions issued by the Central Board of Direct Taxes to which our attention has been invited by counsel for the assessee. From the Circular Instruction No. 33-D(XXV-29) of 1965, dated November 8, 1965, it is seen that the view taken by the Allahabad High Court in the said ....