Y. V. ANJANEYULU, J.

( 1 ) THE Income-tax Appellate Tribunal has referred the following questions of law for consideration of this court under section 256 (1) of the Income-tax Act, 1961 (for short "the Act") :"1. Whether, on the facts and in the circumstances of the case, the Tribunal was right in holding that the interest payments of Rs. 66,671 in the assessment year 1973-74 and Rs. 75,810 in the assessment year 1974-75 are attracted by section 40 (b) of the Income-tax Act, 1961, and are not deductible ? 2. Whether, on the facts and in lie circumstances of the case, the Tribunal was right in holding that the salary payments of Rs. 15,000 in the assessment year 1973-74 and Rs. 24,000 in the assessment year 1974-75 are attracted by section 40 (b) of the Income-tax Act, 1961, and are not deductible ?"

( 2 ) THE assessee is a partnership firm consisting of eight partners. During the accounting year relevant to assessment years 1973-74 and 1974-75, the partnership firm paid interest to four out of the eight partners. The partnership firm also paid salary to two out of the eight partners. The amounts paid by way of interest as well as salary were claimed as deduction in the computation

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