COMMISSIONER OF INCOME-TAX VS J.K. BANKERS.
1991 P T D 190
[Allahabad High Court (India)]
Before R.M. Sahai and R.K. Gulati, JJ
COMMISSIONER OF INCOME-TAX
versus
J.K. BANKERS.
Income-tax Application No. 33 of 1988, decided on 27/02/1989.
Income-tax---
----Firm---Interest paid to partner ---Assessee receiving interest from firm in one capacity and paying interest in another capacity---Tribunal holding that only net amount of interest paid by firm to partner after adjusting interest paid by him to firm is disallowable is a question of law arising from Tribunal's order:
Held, that whether the Tribunal was justified in arriving at the conclusion that only the net amount paid by the firm to a partner after adjusting interest paid by him to the firm should be disallowed under section 40(b) of the Indian Income-tax Act, 1961, irrespective of the fact that amount of interest is received by him in a capacity other than a capacity in which he paid interest to the firm or is a partner in the firm, is a question of law fit to be referred.
JUDGMENT
R.K. GULATI, J.--Upon hearing the parties, we are satisfied that the following question of law does arise out of the order passed by the Income-tax Appellate Tribunal:
"(1) Whether in law and on the facts of the case, the Income-tax Appellate Tribunal was justified in arriving at a conclusion that only the net amount paid by the firm to a partner after adjusting interest paid by him to the firm should be disallowed under section 40(b) of the Income-tax Act, 1961, irrespective of the fact that the amount of interest is received by him in a capacity other than the capacity in which he paid interest to the firm or' is a partner in the firm?"
Accordingly, we direct the Income-tax Tribunal to draw up a statement of the case and refer the above question for the opinion of this Court. Parties shall bear their own costs.
Z.S./765/TOrder accordingly.