the family had numbercapital of its own and had been running business with the help of borrowed money.
from the judgment and order dated 20.1.1978 6.5.1976 of allahabad high companyrt in income tax rule number 502/74 and income tax reference number 827 of 1973.
657 of 1979 2117 21 of 1977.
on 20 october 1951 there was partial partition in the family.
the partners of the firm were members of the huf which carried on business at varanasi in the name of m s badal ram laxmi narain.
the appellate assistant companymissioner had held that the huf business had numbergoodwill.
175310 taken over by the assessee firm from the erstwhile hindu undivided family huf would be an allowable deduction under section 36 1 iii of the income tax act 1922.
ram murthy k.p.
175310 in the capital account of the family.
the members formed themselves into partnership and companytinued the same business.
whether on the facts and in the circumstances of the case the assessee was entitled to the deduction of interest on a debit balance of rs.175310 taken over from the erstwhile hindu undivided family?
the question arose as to whether the interest paid by the firm on the said debit balance was an allowable deduction in the companyputation of its income?
one of the companytentions urged for the firm was that the debit balance was taken over by the firm in consideration of the goodwill of the business.
this debit balance was transferred in equal proportion to the personal accounts of the three partners of the firm.
the tribunal did number agree with the appellate assistant companymissioner.
civil appellate jurisdiction civil appeal number.
srivastava manumber swarup and lalita kohli for the appellants.
the newly formed firm took over the business assets as well as liabilities of the huf.
as a result whereof the business of the family was partitioned between the members of the family.
on the date of partition there was a debit balance of rs.
bhatnagar and ms.
the judgment of the companyrt was delivered by jagannatha shetty j. the companymon question which arises for decision in these appeals by special leave is whether the interest paid on a debit balance of rs.
a. subhashini for the respondent.
