2020 (2) TMI 1617

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....f this appeal, the assessee-appellant has challenged the correctness of the learned CIT(A)'s order dated 4th June, 2018, in the matter of assessment under section 143(3) of the Income Tax Act, 1961, for the assessment year 2013-14. 2. Grievances raised by the appellant are as follows: 1.01 The Learned CIT(A) has failed to appreciate that the learned AO has disallowed the interest expen....

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....eness of interest paid to parties covered u/s. 40A(2)(b) of the Act, a copy of which was submitted to the learned CIT(A) in the paper book submitted to her. Without Prejudice to the above ground : 2.01 The learned CIT(A) erred in law as well as in fact in disallowing interest paid to parties covered u/s. 40A(2)(b) of the Act of Rs. 7,31,537/- as excessive interest without considering the ....

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....r noticed that the assessee has paid interest @ 18% and in one case even 21%, to the persons specified under section 40A(2)(b). These loans were admittedly unsecured loans, without any security whatsoever, and the assessee's claim is that the interest paid is as prevalent market rate. The Assessing Officer was, however, of the view that this rate of interest is excessive and unreasonable. He, acco....

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....aid by the assessee is excessive or unreasonable, we are of the considered view that the interest paid by the assessee is not hit by the provisions of section 40A(2)(b). In any event, the unsecured loans on demand being taken at interest @ 18%, or even @ 21%, are quite in consonance with the ground realities in business. It is also an undisputed position that the assessee had borrowed secured loan....