Notional interest on debit balance of partner's capital a/c
This query is : Open
16 July 2012
Can an officer charge a notional interest on the debit balance of a partner??? The firm is having a income for the year.
16 July 2012
Incase you have paid or received interest for same type of transactions with the other parties( not being partner) then Officer can charge notional interest
16 July 2012
Interest on partner's accounts are governed by the provisions of the partnership deed read along with section 40(b) of the Income tax Act,1961. Accordingly, if the deed contains a specfic provsion regarding levy of interest on debit balance , then the ITO'S contention will sustain otherwise not.
17 July 2012
Thank you....but can u also give any reference of any case law on the same?
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