HIRALAL KASTURCHAND Vs. COMMISSIONER OF INCOME TAX

JUDGEMENT

(1.) BY this reference under Section 256(1) of the Income -tax Act, 1961 (hereinafter referred to as 'the Act'), the Income -tax Appellate Tribunal, Indore Bench, has referred the following question of law to this court for its opinion :

(2.) THE material facts giving rise to this reference, briefly, are as follows ;

(3.) AT the time of hearing, learned counsel for the Revenue conceded that the matter arising in this case is governed by a decision of the Full Bench of this court in CIT v. Narbharam Popatbhai and Sons : [1987]166ITR534(MP) . In view of this decision, it must be held that the Tribunal was not right in holding that the interest paid to the Hindu undivided families of the partners of the assessee -firm was liable to be disallowed under section40(b) of the Act.