COMMISSIONER OF INCOME TAX Vs. NITRO PHOSPHETIC FERTILIZER

JUDGEMENT

(1.) THIS is a reference at the instance of Revenue and relates to the assessment years 1971-72 and 1972-73. R. N. Mehra was one of the partners of the respondent-assessee, Messrs Nitro Phosphetic Fertilizer, Lucknow. He joined the partnership representing the Hindu undivided family of which he was the karta.

(2.) IN the books of account of the firm, there was a capital account for the Hindu undivided family and a deposit in the name of R. N. Mehra, individual. On the deposit in this account, the firm paid interest to the individual and the same was claimed as a deduction in the profit and loss account. The amounts of interest paid were as under : <FRM>JUDGEMENT_269_ITR174_1988Html1.htm</FRM>

(3.) THE Revenue took up the matter in appeal before the Income-tax Appellate Tribunal. THE Tribunal upheld the judgment of the Appellate Assistant Commissioner.