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2016 (6) TMI 1030 - HC - Income TaxInterest paid to the partners disallowance - whether there is no specific provision for claiming interest paid to the partners on their capital against the income from house property? - Held that:- The question whether the business has been closed permanently or there was any intention of resumption of the business is essentially a question of fact and that has to be decided only on the basis of documentary evidence and such other evidences which may be adduced. Similarly, whether interest was authorised by the Partnership Deed is also a question, which was never considered by any of the statutory authorities. At the same time we find some substance in the submission that the income derived by the assessee by letting out the godown may be treated as a business income. In that view of the matter, the matter is remanded to the Assessing Officer. He will consider the questions (a) whether the income can be treated as an income arising out of business; and (b) whether the payment of interest to the partners can be allowed as a permissible deduction. He will decide these questions, after taking such evidence as the assessee may adduce, in accordance with law. The questions formulated at the time of admission of appeal have now become redundant and they need not be answered.
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