LAWS(KAR)-1984-12-33

RAMANJANEYA TEXTILES Vs. COMMISSIONER OF INCOME TAX

Decided On December 17, 1984
SHRI RAMANJANEYA TEXTILES, BANGALORE Appellant
V/S
COMMISSIONER OF INCOME-TAX Respondents

JUDGEMENT

(1.) THESE are references under section 256(1) of the income-tax Act, 1961. The common question referred by the Tribunal is :

(2.) THE partners in the assessee-firm were "kartas" representing their respective Hindu undivided families. THE assessee-firm paid a sum of Rs. 16,124 as interest to the account of the Hindu undivided families Before the Income-tax Officer, the assessee-firm claimed that the interest so paid to the Hindu undivided families should be allowed as deduction and section 40(b) of the Income-tax Act, 1961, is no bar for such a claim. THE Income-tax Officer did not agree with the contention. He observed that for purposes-of section 40(b) of the Income-tax Act, 1961, whether the partner received the interest in his individual capacity or in the capacity of the "karta" of the Hindu undivided family, is not a relevant factor. So stating, he disallowed the entire interest.

(3.) ON the said facts, the Tribunal inferred :