TaxTMI 
TaxTMI 
2016 (10) TMI 176
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....s own case for the assessment year 2004-05 out of interest as made by the AO under the provisions of section 40A(2)(b) of the Income Tax Act, 1961(hereinafter referred to as the Act). 3. At the time of hearing, the ld.AR submitted that the present case of the assessee is covered by the decision of Co-ordinate Bench of the Tribunal in assessee's own case in ITA No.466/Mum/2013 (AY-2009-10) vide order dated 18.5.2016. The ld. AR further submitted that the decision of the ld.CIT(A) based on assessment year 2004-05 confirming the disallowance has also been discussed by the Co-ordinate Bench of the Tribunal in its decision for the assessment year 2009-10 and therefore the issue is directly covered in favour of the assessee and accordingly the d....
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....b) was not excessive and unreasonable in light of the opinion of the Assessing Officer that the interest at the rate of 12% was reasonable and the findings of the Hon'ble Tribunal in the case of the assessee itself for the A.Y. 2004-05 on the same set of facts. Charging of interest at a given rate from trade debtors cannot be taken to be the market rate for the purposes of loans since these are not comparables. The assessee has not been able to demonstrate as to how the interest rate of 18% was the market rate". Aggrieved, now assessee is in second appeal before the Tribunal. 5. We have heard the rival contentions and gone through the facts and circumstances of the case. Before us, Ld. Counsel for the assessee clearly stated that ....
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.... for the purpose of business and the lower authorities have not elaborated that how this expenditure of interest is excessive or unreasonable having regard to the fair market value of the goods, services or facilities for which the payment is made. 6. On the other hand, Ld. Sr.DR argued that this issue is covered by the Tribunal's order in assessee's own case for assessment year 2004- 05 and which has been followed in assessment year 2005-06, 2006-07, 2007-08 and 2008-09. According to him, the disallowance made by the Assessing Officer and confirmed by CIT(Appeals) is perfectly as per the provisions of the Act. 7. We have gone though the details of interest paid to the family members and noticed that these parties have included the re....
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....cludes some other hidden charges and it is also fact that bank while sanctioning loan put quite onerous liabilities like submission of stock statements, project report by Chartered Accountant, timely payment of instalments and also satisfactory securities of equal amount or more of loan. According to Ld. Counsel for the assessee this loan taken from bank is for fixed period and payment is made by the end of the period with constant monitoring and checks. Whereas, the loan from the family members and relatives can be obtained and returned without any hustles so there is premium on the same and this a normal market practice. We find that the assessee has tried to explain his case from all angles and moreover the decision relied upon by Ld. Co....