Assertion (A): Avinash, a partner in the firm gave loan of ₹ 5,00,000 to the firm without an agreement as to rate of interest. Interest on Loan by Avinash is to be allowed @ 6% p.a.
Assertion (A): Avinash, a partner in the firm gave a loan of ₹ 5,00,000 to the firm without an agreement as to rate of interest. Interest on Loan by Avinash is to be allowed @ 6% p.a.
Reason (R): In the absence of the Partnership Deed, provisions of the Partnership Act, 1932 apply. Thus, Interest on the Loan to the Partner should be charged @ 6% p.a.
In the context of the above two statements, which of the following is correct?
a) Assertion (A) and Reason (R) are correct but the Reason (R) is not the correct explanation of Assertion (A).
b) Both Assertion (a) and Reason (R) are correct and Reason (R) is the correct explanation of Assertion (A).
c) Assertion (A) is correct but the Reason (R) is incorrect.
d) Assertion (A) is not correct but the Reason (R) is correct.
Anurag Pathak Changed status to publish April 15, 2023
Ans – c)
In the absence of the Partnership Deed, the Indian Partnership Act 1932 applies, Thus, Interest on Avinash’s loan to the firm would be allowed @ 6% p.a.
Thus Assertion (A) is correct.
Reason (R) talks about providing interest on a loan to a partner by a firm @ 6% p.a. in the absence of a partnership deed. The logic is absolutely incorrect as in the absence of a partnership deed, no interest is charged on the loan to the partner by the firm.
Thus Reason (R) is Incorrect.
Anurag Pathak Changed status to publish April 4, 2023
