Interest Over 12% to Partner Disallowed; Firm's Petition for Tax Revision Dismissed Under Income Tax Act Section 264.

X X   X X   Extracts   X X   X X

Full Text of the Document

X X   X X   Extracts   X X   X X

....Revision u/s 264 - Seeking revision since the payment of interest in excess of 12% to a partner disallowed in the hands of partnership firm - Under the Income Tax Act, the firm and the individual partners are different entities. The disallowance of expenditure in the case of one entity does not entitle the other entity (recipient) to claim deduction of the disallowed expenditure. In this case assessee has actually received interest and obtained benefit to that extent. In view of the above, the petition u/s. 264 of the assessee considered devoid of any merit and hereby rejected. - HC....