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2011 (3) TMI 964 - AT - Income TaxDisallowance u/s 40(b) - The dispute is related to the determination of the Capital account balances of the partners on which the interest is payable - Held that: the assessing officer is authorized only to verify whether the payment of interest to any partner is authorized by and is in accordance with the terms of partnership deed and also it relates to the period falling after the date of partnership deed - it could be seen that no where it is provided that the assessing officer is entitled to disallow the payment of interest to partners by reworking the capital account balances of the partners - Assessing Officer is not entitled to compel the assessee to provide for depreciation in the books of account and consequently not entitled to recomputed the capital account balances of the partners by deducting the cumulative amount of depreciation that was allowed in the hands of the assessees herein - Decided in the favour of assessee
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