Assessing Officer Disallows 3% Excess Interest u/s 40(A)(2)(b); Assessee Defends as Standard Industry Practice.

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....Disallowance of interest expenditure u/s 40(A)(2)(b) - AO disallowed 3% excess interest - the assessee is justified in claiming that the bank rate of interest is a universal rate of industry and can be said to be fair, subject to the adjustments on account of the variations between the terms like security-requirement by bank, levy of charges, fulfillment of formalities etc. Therefore, 3% margin on account of these factors cannot be said to be excessive or unreasonable. - AT....