9911796707
TMI Blog2021 (2) TMI 1148X X X X Extracts X X X X X X X X Extracts X X X X ..... the assessee filed its return of income on 26-12-2014 declaring total income of Rs. 7,38,880/-.In course of assessment proceedings, the Assessing Officer on verifying the materials on record found that the assessee had availed unsecured loans both from related and unrelated parties. Further, he found that while the assesse is paying interest @ 11% to 12% per anum (p.a.) to unrelated parties, it is paying interest @15% p.a. to related parties. Noticing this, the Assessing Officer called upon the assessee to explain the reason for paying higher rate of interest to related parties and also to explain why excess interest paid should not be disallowed. Though, the assessee justified the payment of interest at higher rate to the related parties; ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ancial institutions, apart from paying higher rate of interest, the assessee, not only would have paid additional cost by way of processing charges, but would have been required to secure the loan by mortgaging its assets. Thus, he submitted, the interest paid @15% being reasonable, should be allowed. In support of his contention, learned Counsel for the assessee relied upon the following decisions:- 1. Motilal Laxmichand Sanghavi vs ACIT (2019) 178 ITD 710 (Mum) 2. PCIT vs Cama Hotels Ltd (2016) 240 Taxman 770 (Guj) 3. CIT vs Sarjan Realities Ltd (2014) 227 Taxman 225 (Guj) 4. CIT vs Shiv Kumar (2013) 217 Taxman 73 (Del) 5. R.N. Gupta & Co. Ltd vs ACIT (2016) 69 taxmann.com 291(Chd) 6. DCIT vs Shiv Kumar (ITA No.3247/Del/2 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... I report reproduced in learned Commissioner (Appeals) order and a copy of which has also been furnished in the paper book, it is very much clear that the rate of interest normally charged by commercial banks on loan varies between 12% to 20%. Further, it cannot be denied that if the assessee would have availed loan from banks and financial institutions, apart from paying higher rate of interest it would have paid additional cost by way of processing charges and would also have been required to furnish collaterals to secure the loan. Whereas, while availing loan from the related parties, which are stated to be long term loans, the assessee neither has to pay any additional cost nor has to furnish any collaterals. Thus, the assessee is rather ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
