https://www.taxtmi.com/caselaws?id=234655 Defects in stock and production records justified rejection of the books, but profit had to be re-estimated on the average gross profit rate of earlier accepted years rather than by a mechanical highest-rate approach. Interest paid to related persons was not excessive merely because it exceeded bank lending rates, as unsecured related-party borrowing could justify a higher commercial rate; relief was allowed by restricting disallowance to the extent above 18%. A subsidy tied to fixed capital investment in plant and machinery had to be reduced from the depreciable cost. Unsupported factory, telephone and vehicle-related claims also warranted a 10% ad hoc disallowance. en-us Mon, 27 May 2013 00:00:00 +0530 Fri, 21 Jun 2013 15:41:29 +0530 TaxTMI RSS Generator https://www.taxtmi.com/caselaws?id=234655 Defects in stock and production records justified rejection of the books, but profit had to be re-estimated on the average gross profit rate of earlier accepted years rather than by a mechanical highest-rate approach. Interest paid to related persons was not excessive merely because it exceeded bank lending rates, as unsecured related-party borrowing could justify a higher commercial rate; relief was allowed by restricting disallowance to the extent above 18%. A subsidy tied to fixed capital investment in plant and machinery had to be reduced from the depreciable cost. Unsupported factory, telephone and vehicle-related claims also warranted a 10% ad hoc disallowance. Case-Laws Income Tax Mon, 27 May 2013 00:00:00 +0530 https://www.taxtmi.com/caselaws?id=234655