Disallowance of interest on partner’s loan unjustified as partnership deed specifies entitlement of interest

ACIT Vs Modesty Garments (ITAT Delhi) ITAT Delhi held that as per partnership deep, partners shall be entitled to interest on their loan accounts with the firm at the prescribed rates, hence disallowance of the same is unjustified. Facts- During the course of assessment proceedings, the AO made several disallowance. Accordingly, the assessee preferred appeal before the Ld. CIT(A) who deleted the disallowance of Rs.29,80,679/- being interest paid to the partners to the firm; deleted addition of Rs.3,46,50,000/- made by the Ld. AO under section 68 of the Act; restricted the disallowance to Rs. 7...