Gokal Chand Mital, J.

1. Chiranji Lal, Mangat Rai and Jiwan were partners of Hindustan Steel Forgoings, Rajpura, the assessee, in their capacity as kartas of their respective Hindu undivided families. They had their personal accounts with the assessee in which they had advanced money in their individual capacity and during the accounting period relevant to the assessment year 1978-79, the assessee paid interest to them on their individual accounts totalling Rs. 12,840. Before the Income-tax Officer, the assessee claimed deduction of the interest paid but the Income-tax Officer disallowed the same on the ground that it was hit by the provisions of Section 40(b) of the Income-tax Act, 1961 (hereinafter called "the Act"), because the representative capacity of the partners could not be taken note of and the interest paid would be considered as having been paid to the partners, The Appellate Assistant Commissioner agreed with the Income-tax Officer and so also the Tribunal. On the aforesaid facts, the Income-tax Appellate Tribunal, Chandigarh, has referred the following question for our opinion.

"Whether, on the facts and circumstances of the case, the Tribunal erred in law in