Assessee-firm had three partners. One of the partner had debit balance . On borrowed money the assessee was paying interest at the rate of 12 percent .\u00a0 The Assessing Officer disallowed the interest paid on borrowed\u00a0 amount . CIT (A) deleted the addition .\u00a0 On appeal by revenue the Tribunal held that debit balance in one of partner’s current account was appearing for last several years and in none of earlier years any such hypothetical income had been subjected to tax in hands of assessee, following principle of consistency, there was no justification of Assessing Officer in imputing interest income on debit balance of said partner and subjecting same to tax in hands of assessee in assessment year in question .\u00a0 (AY. 2011-12 )<\/p>\n","protected":false},"excerpt":{"rendered":"
S. 36(1)(iii) :Interest on borrowed capital \u2013 Debit balance in one of partner\u2019s current account for last several years \u2013 Principle of consistency is followed \u2013 Disallowance of notional interest of 12 % is held to be not valid . <\/p>\n","protected":false},"author":3,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"jetpack_post_was_ever_published":false,"_jetpack_newsletter_access":"","_jetpack_dont_email_post_to_subs":false,"_jetpack_newsletter_tier_id":0,"_jetpack_memberships_contains_paywalled_content":false,"_jetpack_memberships_contains_paid_content":false,"footnotes":""},"categories":[21],"tags":[],"class_list":["post-19281","post","type-post","status-publish","format-standard","hentry","category-income-tax-act"],"acf":[],"jetpack_featured_media_url":"","jetpack_shortlink":"https:\/\/wp.me\/p9S2Rw-50Z","jetpack-related-posts":[],"jetpack_sharing_enabled":true,"_links":{"self":[{"href":"https:\/\/itatonline.org\/digest\/wp-json\/wp\/v2\/posts\/19281","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/itatonline.org\/digest\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/itatonline.org\/digest\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/itatonline.org\/digest\/wp-json\/wp\/v2\/users\/3"}],"replies":[{"embeddable":true,"href":"https:\/\/itatonline.org\/digest\/wp-json\/wp\/v2\/comments?post=19281"}],"version-history":[{"count":1,"href":"https:\/\/itatonline.org\/digest\/wp-json\/wp\/v2\/posts\/19281\/revisions"}],"predecessor-version":[{"id":19282,"href":"https:\/\/itatonline.org\/digest\/wp-json\/wp\/v2\/posts\/19281\/revisions\/19282"}],"wp:attachment":[{"href":"https:\/\/itatonline.org\/digest\/wp-json\/wp\/v2\/media?parent=19281"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/itatonline.org\/digest\/wp-json\/wp\/v2\/categories?post=19281"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/itatonline.org\/digest\/wp-json\/wp\/v2\/tags?post=19281"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}