Mandate to charge the int on drawings to partners by firm

hetalsangoi (Querist) 29 December 2013 This query is : Resolved
under law, when Income tax officer manadate to charge the interest on drawings to partners by firm .deed has expressed the int on capital of partners on opening balance @12% but there is no clause for charging the interest on drawings ?
Mandate to charge the int on drawings to partners by firm , pl provide the supporting case law for study

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ajay sethi (Expert) 29 December 2013
we dont provide case laws . search in indian kanoon .com for case laws .

consult your CA

Devajyoti Barman (Expert) 29 December 2013
yes do as advised above.

Rajendra K Goyal (Expert) 29 December 2013
For case law search google.

T. Kalaiselvan, Advocate (Expert) 30 December 2013
Settled laws will be available in the concerned section of the google site, a free browsing would fetch results.

Vineet (Expert) 31 December 2013
There is no specific provision for charging of interest on partner's withdrawals. AO can disallow interest exp in hand of firm invoking doctorine of diversion of borrowed firms supported with facts but it cannot compel firm to earn income on its surplus funds. Rest depends on facts of the case as in your case partners are entitled for interest only on opening balance though for entire year there may be negative balance in their account. This will not be permissible even under u/s 37.