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2013 (12) TMI 1416 - HC - Income TaxLoan taken at higher interest rate than bank rate - Held that:- The Tribunal has confirmed the finding of CIT (A) and AO - The appellant borrowed from the outsiders at 18%, the capital borrowed from family members and sister concern was at 24% - Bank rate was not more than 21% - The A.O. tried to enter into the true nature of transaction in which he found it unreasonable for the assessee to borrow from the family members at a higher rate than the borrowings from outsiders - The payment of interest to the family members and sister concern at 24% was diversion of profits - It was found highly unusual for a person to borrow from the family at higher rate than the rate prevailing in the market and the rate of interest to be paid to the bank - Decided against assessee.
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