Judgment N.K.Sud, J. 1. At the instance of Revenue, the Tribunal, Chandigarh Bench, Chandigarh (for short the Tribunal), has referred the following question of law arising out of its order dt. 31st Aug., 1990, relating to asst. yr. 1982-83 for the opinion of this Court : "Whether, on the facts and in the circumstances of the case, the Tribunal was right in law in holding that the provisions of Section 40(b) of the IT Act, 1961, will not apply in the case of the assessee ?" 2. Assessee is a registered firm consisting of 10 partners. In addition to share of profit, nine partners also received interest on their capital. While computing its income, the assessee had added an amount of Rs. 91,200 on account of interest paid to the partners under Section 40(b) of the Act in its total income. However, it filed a revised return on 8th Sept., 1983, claiming that interest paid to six partners namely, Darshan Lal Jain, Nem Chand Jain, Jainder Kumar Jain, Vijayder Kumar Jain, Jarender Kumar Jain and Deepak Jain amounting to Rs. 74,840 could not be treated as interest paid to partners as it had been paid to their HUFs. This claim was disallowed by the AO on the ground that all the above-mentioned six partners were partners in representative capacity representing their respective HUFs and, therefore, the interest paid to their HUFs was in fact interest paid to partners and was, therefore, governed by the provisions of Section 40(b) of the Act. 3. Assessee preferred an appeal before the CIT(A), Chandigarh, who accepted its claim and deleted the addition of Rs. 74,840. 4. Aggrieved by the said order of the CIT(A), the Revenue filed an appeal before the Tribunal which was dismissed. 5. The matter should not detain us for long as the position stands clarified by virtue of the Explns. 1, 2 and 3 to Clause (b) of Section 40 of the Act which were inserted by Taxation Laws (Amendment) Act, 1984, w.e.f. 1st April, 1985. The Expln. 5. The matter should not detain us for long as the position stands clarified by virtue of the Explns. 1, 2 and 3 to Clause (b) of Section 40 of the Act which were inserted by Taxation Laws (Amendment) Act, 1984, w.e.f. 1st April, 1985. The Expln. 2 reads as under : "Explanation 2 : Where an individual is a partner in a firm on behalf, or for the benefit of any other person (such partner and the other person being hereinafter referred to as partner in a representative capacity and person so represented respectively : (i) interest paid by the firm to such individual, or by such individual to the firm otherwise than as partner in a representative capacity, shall not be taken into account for the purposes of this clause : (ii) interest paid by the firm to such individual or by such individual to the firm as partner in a representative capacity and interest paid by the firm to the person so represented or by the person so represented to the firm, shall be taken into account for the purposes of this clause." As per Clause (ii) above, it is clear that if a person is partner in a representative capacity, then interest paid to the person so represented is to be taken into account for the purposes of Clause (b) of Section 40 of the Act. In other words, when a person is partner in a representative capacity, interest paid to him in the representative capacity is hit by Section 40(b) of the Act. 6 In the present case, it is not in dispute that the six persons mentioned above, are partners in the representative capacity representing their respective HUFs and, therefore, interest paid to their HUFs has to be treated as interest paid to partners. The apex Court in Brij Mohan Das Laxman Das v. CIT (1997) 223 ITR 825 (SC), has held that Expln. 2 is declaratory in nature and governs all the previous assessment years as well. 7. In view of the above, we answer the question in the negative i.e., against the assessee and in favour of the Revenue.