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Interest paid to partners on capital is not a statutory allowance u/s 40(b) but is an expenditure u/s 36(1) - Sec. 14A read with Rule 8D is applicable

Commentaries / Editorials - Dated:- 5-2-2016 - Relevant Extract of the decision of the Tribaunl in A.C.I.T. 19 (3) , Mumbai Versus M/s Pahilajrai Jaikishin and M/s Pahilajrai Jaikishin Versus D.C.I.T. 19 (3) , Mumbai - 2016 (2) TMI 170 - ITAT MUMBAI .....

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ital by satisfying the provisions of Section 36(1)(iii) of the Act and then, Section 40(b) of the Act puts limitation on allowability of interest once it passes the requirements of provisions of Section 36(1)(iii) of the Act and thus , interest paid .....

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this Act as envisaged u/s 14A of the Act, the same shall only be allowed as deduction only against the exempt income u/s 14A of the Act or in other words , such interest expenditure on the partner capital shall be disallowed u/s 14A of the Act. Our a .....

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omputed under 44AD(1) and 44AE(1) of the Act , subject to the conditions and limits specified in clause (b) of section 40 , rather this contention of the assessee support the stand that the salary and interest payable to partners are an expenditure c .....

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he same is incurred in relation to the income which is not includible in the total income u/s Section 14A of the Act and in that circumstances this interest paid to partners are to be considered as allowable expenditure only against the exempt income .....

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iture , which is allowable as an expenditure being incurred by the assessee firm in relation to an income which does not form part of the total income of the assessee firm under the Act , and shall be allowed as deduction from the dividend income fro .....

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