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2012 (6) TMI 356 - ITAT MUMBAIDis-allowance u/s 14A of notional interest paid on loan taken for capital contribution in partnership firm - Revenue contended that interest incurred has resulted into taxable as well as tax free income u/s 10(2A) and hence that portion of the interest expenditure which relates to the share of profit is Liable to be disallowed - Held that:- Partnership Act does not contemplate or stipulate capital contribution by the partner as one of the conditions for a partnership firm. Nowhere in the clauses of partnership Agreement it has been stated that contribution of money towards capital or loan were the conditions of admittance of the new partners for sharing of profits by the partners Alt the partners, including the appellant, are entitled to the profit sharing as per the partnership deed and the same was not dependent on contribution of funds made by the partners. Hence, CIT(A) rightly held that the provisions of section 14A are not applicable in the present case - Decided in favor of assessee.
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