2014 (3) TMI 145

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....) Revenue has raised following questions for our consideration with respect to assessment year 2008-09 challenging the order of the Income Tax Appellate Tribunal ('Tribunal' for short) dated 12.7.2013: "1. Whether on the facts and circumstances of the case and in law, the appellate Tribunal was justified in not upholding the disallowance of excess interest u/s 40A(2)(a) to the extent of Rs.9....

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.... 1961 ('the Act' for short). The Assessing Officer noticed that the assessee had taken unsecured loans from various sources and in some cases paid 18% interest to its own directors on such loans. He noticed that the loans were taken at interest rates ranging from 12 % to 18%. He, therefore, called upon the assessee and after considering the objections held that interest of 18% was excessive and di....

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....rising. The assessee paid interest in the range of 12% to 18% on unsecured loans. It was pointed out by the assessee that in the business of making beedies finances were needed for steady flow of cash to keep the business going. The interest rates were related to old borrowings. In the earlier years, such interest rate was accepted by the Revenue. Secondly the directors in question were in the hig....