Interest cannot be charged on Debit Balance of Partner if Partnership Deed prohibits the same

DCIT Vs Ms. India Housing (ITAT Kolkata) We note that as per clause 10 of the Partnership Deed, no interest was to be charged or paid to the partners in respect of balances standing to the debit or credit of their capital account. As per Partnership Act, 1952, the partners can carry on any business jointly and can also act upon in the manner as they deem fit in the inter se relationship between them. We note that the debit balance in one of the partner’s current account i.e, Carlton Hotel (P) Ltd, is appearing for last several years and the case of the assessee has been under scrutiny an...