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Question
Assertion (A): Batman, a partner in a firm with four partners, has advanced a loan of ₹ 50,000 to the firm for the last six months of the financial year without any agreement. He claims an interest on a loan of ₹ 3,000 despite the firm being in loss for the year.
Reasoning (R): In the absence of any agreement/provision in the partnership deed, provisions of the Indian Partnership Act, 1932, would apply.
Options
Both A and R are correct, and R is the correct explanation of A.
Both A and R are correct, but R is not the correct explanation of A.
A is correct but R is incorrect.
A is incorrect but R is correct.
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Solution
A is incorrect, but R is correct.
Explanation:
Batman is entitled to interest on his loan at 6% p.a. as per the Partnership Act, even if the firm incurs a loss. However, his claim of ₹ 3,000 is wrong because the correct interest works out to ₹ 1,500 only. The reason is correct, as it explains the application of the Partnership Act in the absence of a deed provision.
