Query on accounts

RAJESH KHANNA (SALES CUM ACCOUNT EXECUTIVE)   (148 Points)

24 August 2016  
There is a partnership firm which started on 1st April, 2016 involved in Trading Business. From 1st April, 2016 till 24th August, 2016, the Firm has curtailed a Net Loss of Rs. 1026067.35 and Loan Liability taken from Partner of the firm for Partnership firm is about 10,00,000/-. Please advise Interest on Loan has to be paid to The partner Current Account. Although the partner has refused to take interest on Loan since the partnership firm is presently having Financial Loss and he does want to put any further financial burden on the Firm. Please advise following: Is payment of Interest on Loan mandatory to be paid to partner who has given Loan to Partnership firm from his personal account to meet the expenses of Partnership firm. In the partnership deed there is no such indication as to whether interest on loan will be given to partner. The partner of the firm has refused to take the Interest on Loan and Interest on Capital since the partnership firm is already having financial loss of Rs. 1026067.35. Please help in resolving this issue.