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TMI Blog2010 (5) TMI 715X X X X Extracts X X X X X X X X Extracts X X X X ..... ing paid interest at the rate of 24 percent which is just fair and reasonable, the learned lower authorities grossly erred in holding that disallowance is required to be made when the interest has been paid at the rate of 24 per cent. 2. That agreements with various creditors being to pay interest at the rate of 24 per cent., such interest having been paid in the past, such rate is not excessive or unreasonable, the learned lower authorities grossly erred in holding that the rate of interest at the rate of 24 percent is unreasonable. 3. That many of the cash creditors to whom interest having been paid being not persons covered under section 40A(2)(b) of the Income tax Act, 1961, even the auditor having wrongly covered them under section 4 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ercent per annum, 12 percent per annum and 24 percent per annum However, the learned Commissioner of Income-tax (Appeals) confirmed the action of the Assessing Officer. During the course of hearing before me, learned counsel for the assessee contended that the assessee derives income from trading of kirana goods, gud, sugar items on wholesale basis in the name of his proprietary concern. It is a fact that the assessee charged interest from various innumerable debtors running into hundred of numbers at the rate of 24 percent on the amount outstanding while the interest was paid to a few creditors at the rate of 24 percent When interest has been received at the rate of 24 percent there was no harm in paying interest at the rate of 24 percent ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... broker who is paid brokerage at the rate of 2 percent If interest is paid in advance, every two months, brokerage is paid at the rate of 2 percent then the rate of interest would work out to almost 24 percent when in the instant case no hassles are there, loan is available for a fixed period and not payable on demand or interest is not paid every two months and no brokerage is paid. On the other hand, the learned Departmental representative contended that the Assessing Officer in paragraph 3 of his order has given specific findings that the assessee has given interest to the family members at the rate of 24 percent and 12 percent to other than family members while prevailing bank interest rate is 12 percent Thus the Assessing Officer has j ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Ahmedabad Bench in the case of Omkarmal Gaurishankar v. ITO [1991] 39 TTJ 223 held that the rate of 24 percent cannot be treated as unreasonable or excessive and therefore, directed allowance of the entire interest. Further, it is held that deposits being old, interest thereupon was never disallowed in the past, no disallowance in respect of interest is validly being made. In this case also, interest has been paid in the past at the rate of 24 percent In view of the above, it is held that funds being used for business purposes coming over from the preceding assessment years, in the past years it having been allowed at the rate of 24 per cent., interest of 24 percent being not excessive or unreasonable in view of the factum that the assessee ..... X X X X Extracts X X X X X X X X Extracts X X X X
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