1982 (1) TMI 86

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.... of Rs. 440 under the head 'litigation expenses' and second that add-back of Rs. 976 under s. 40(b) of the IT Act, 1961 was wrongly made and confirmed. The assessment year involved is 1979-80 and the order under appeal is dt. 29th April, 1980 passed by the AAC, Patiala Range, Patiala. 2. The ITO disallowed the assessee's claim of Rs. 440 as litigation expenses incurred for evicting a tenant by ....

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....lowed. In this connection we like to notice para 5 of this Bench's order dt. 24th July, 1981 in ITA Nos. 1011 & 1012/Chd/1979 in the case of M/s. Ganesh Factory, Rajpura: "5. On the question of s. 40(B) disallowance, we have come across similar cases and have taken a consistent approach that when Karta of a HUF is a partner in a firm and has also an individual account with the firm, interest pa....

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....ts the HUF in a firm is the partner for all practical purposes both under the partnership law and income-tax law. It is, therefore, not possible to proceed on the footing that an UF HUFHHUF is a partner in a firm for the purpose of S. 40(B) of the Act. It was further held that in order to disallow a payment of interest by the firm under s. 40(b) of the Act, the test to be applied is as to whether ....