TMI Blog1978 (11) TMI 8X X X X Extracts X X X X X X X X Extracts X X X X ..... h the firm. The firm paid interest to the partners on the balances in the capital account. The firm also charged interest from the partners on the debit balances of their current account. For the assessment years 1970-71, 1972-73 and 1973-74, the ITO disallowed the entire amount of interest paid by the firm to its partners in respect of the capital account under s. 40(b) of the I.T. Act. The ass ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... -tax Act, 1961 ? " In CIT v. London Machinery Co. (Income Tax Reference No. 608 of 1977, decided on 26th October, 1978) [1979] 117 ITR 111, a Bench of this court has held that payment of interest to a partner on amounts brought by him from his HUF or from his individual funds is in either case payment of interest to the partner and both these kinds of payments are within the purview of s. 40(b) ..... X X X X Extracts X X X X X X X X Extracts X X X X
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