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Section 40(b) of the Income-tax Act, 1961 - Business disallowance - Interest, salary, etc. paid by firm to partner - Assessment year - 1981-82 - Whether where HUF was partner in firm and karta in his individual status had been paid interest on amounts advanced to firm, provisions of section 40(b) were not attracted - Held, yes FACTS The Tribunal held that when a (HUF) was partner in a firm, interest paid to karta in his individual status was allowable in his individual capacity and provisions of section 40(b) were not attracted. On reference: HELD In view of the decision of the Orissa High Court in CIT v. Onkarmal Nanakram (No. 1) [1993] (1993) 200 ITR 193, it was to be held that the provisions of section 40(b) were not attracted in the instant case. Note : The case was decided in favour of the assessee. CASE REFERRED TO CIT v. Onkarmal Manakram (No. 1) [1993] (1993) 200 ITR 193 (Ori.). A.K. Roy for the Applicant. Arjun Agarwalla for the Respondent. JUDGMENT Heard Mr. A.K. Roy, learned standing counsel for the Department, and Mr. Arjun Agarwalla, learned counsel for the assessee. On being moved by the Revenue, this court had directed the Income-tax Appellate Tribunal, Cuttack Bench, Cuttack (in short, "the Tribunal"), to state a case and refer the following question for opinion : "Whether the Tribunal erred in law in its direction that interest paid to the…

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