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TMI Blog2016 (4) TMI 43X X X X Extracts X X X X X X X X Extracts X X X X ..... t the interest paid by the assessee to the persons mentioned under section 40A(2)(b) is commensurate with the interest rate prevailing in the open market. In the light of such finding of fact, it is not possible to state that the conclusion arrived at by the Tribunal that the assessee has not extended any undue benefit to the persons covered under section 40A(2)(b) of the Act, suffers from any leg ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ITA No.1834/Ahd/2012, by proposing the following two questions: [1] Whether the Appellate Tribunal has erred in law and on fact in holding that payment of interest @ 15% and 16% to the persons covered u/s 40A(2)(b) is commensurate with the prevailing market rate? [2] Whether the Appellate Tribunal has erred in law and on fact in deleting the amount of ₹ 2,63,12,188/- treated by t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tended by the assessee to the persons mentioned in sub-clause (2)(b) of section 40A of the Act on account of their association with the assessee, then the deduction claimed for that benefit ought to be disallowed to the assessee. In other words, if the assessee can avail the facility from the open market at a lower price than similar facility availed from the persons covered under section 40A(2) ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ent of interest at a little higher rate to the persons even if covered under section 40A(2)(b) cannot be termed as exorbitant when the fair market value of such interest cost is being considered. The Tribunal found, as a matter of fact, that the assessee had paid interest commensurate with the interest rate prevailing in the open market. In the light of the above findings of fact recorded by it, t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t the matter requires consideration. Hence, ADMIT. The following substantial question of law arises for consideration : Whether on the facts and in the circumstances of the case, the Income Tax Appellate Tribunal was justified in deleting the amount of ₹ 2,62,12,188/- treated by the Assessing Officer as deemed dividend under section 2(22)(e) of the Income Tax Act, 1961? - - TaxTMI ..... X X X X Extracts X X X X X X X X Extracts X X X X
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