Law:

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Section 40(b) of the Income-tax Act, 1961 [Corresponding to section 10(4)(b) of the Indian Income-tax Act, 1922] - Business disallowance - Interest, salary, etc. paid by firm to partner - Assessment year 1957-58 - High Court held that amount of Rs. 28,422 paid by assessee-firm to members of management board who were appointed to manage affairs of firm, could not be disallowed under section 10(4)(b) of 1922 Act - Whether having regard to small sum involved, huge lapse of time and fact that assessee-firm was having nine partners and fact that question involved was not of recurring importance and was decided on special facts of case appeal was to be dismissed without expressing any opinion - Held, yes FACTS A sum of Rs. 28,422 paid by the assessee- firm to the members of a management board who were appointed to manage the affairs of the firm for sometime. The High Court held that said sum could not be disallowed under section 10(4)(b) of the 1922, Act. On appeal to the Supreme Court: HELD Having regard to the small sum involved, the huge lapse of time, and the fact that the assessee-firm was having as many as nine partners, it was not necessary to express opinion on a…

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