Assertion (A): Bharat, a partner in the firm gave loan of ₹ 5,00,000 of the firm without an agreement as to rate of interest. At the year end, the remaining partners agreed to allow interest on Loan by Bharat @ 8% p.a.
Assertion (A): Bharat, a partner in the firm gave a loan of ₹ 5,00,000 to the firm without an agreement as to the rate of interest. At the year’s end, the remaining partners agreed to allow interest on Loan by Bharat @ 8% 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. and not @ 8% 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 not correct.
d) Assertion (A) is not correct but the Reason (R) is correct.
Anurag Pathak Changed status to publish April 15, 2023
Ans – c)
As Partners agreed to provide Interest on Bharat’s Loan @ 8% p.a. It should be provided at the agreed rate.
Thus Assertion (A) is correct.
As there is consensus and agreement among the partners regarding the rate of interest on Bharat’s loan to the firm. It must be allowed at the agreed 8% pa. rate not at the 6% p.a.
Thus the Provisions of the Indian Partnership Act, 1932 will not be applied
Thus Reason (R) is incorrect.
Anurag Pathak Changed status to publish April 10, 2023
