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2012 (8) TMI 801 - AT - Income TaxDis-allowance u/s 40(ba) - interest paid to directors/trustees - assessee, a registered trust, being assessed as AOP - Held that:- Whether or not the assessee is assessed in the status of AOP or individual, it does not matter. The dis-allowance u/s 40(ba), can be made only with regard to the interest paid to the members of the AOP. The trustees of the assessee trust cannot be described as members of the AOP. See Shardaben Bhagubhai Mafatlal Public Charitable Trust (2000 (9) TMI 45 - BOMBAY HIGH COURT ). CIT(A) was justified in deleting the said dis-allowance - Decided in favor of assessee Dis-allowance made u/s 40A(2)(b) - interest paid on unsecured loans @ 18% - AO applying rate of 15% based on the lending rate of banks - Held that:- It is pointed out that the banks lend money after accepting security and the trustees had given unsecured loans to the trust. Also, Tribunal in various cases has held that interest paid at 24% p.a. cannot be said to be unreasonable. In view of aforesaid, matter restored to file of AO to consider de novo, and contention of the assessee with regard to the fact that the payment of interest at 18% p.a.is not excessive and unreasonable
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