Relief to Muthoot Bankers: ITAT Allows ₹5L Interest Deduction u/s 40(b) as Payment was within 12% Limit and Authorized by Partnership Deed

The ITAT allowed interest deduction of ₹5 lakh under Section 40(b), stating the interest was within the 12% limit and authorized by the partnership deed. The decision highlights the importance of compliance with statutory provisions and proper documentation in partnership firms. This sets a precedent for claiming deductions when terms are pre-agreed and legally validated, protecting genuine claims from disallowance.