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2016 (7) TMI 1452 - AT - Income TaxDisallowance in respect of interest paid on borrowings u/s. 40A(2)(b) - assessee has paid interest to unrelated parties at varying rates of 6%, 12% and 16% - Held that:- Solely because assessee had paid interest at different rates to different parties, that itself could not be a ground to come to the conclusion that payment of interest to related parties at rate other than that paid to other party was excessive and unreasonable. Our view is fortified by the decision of the Hon’ble Jurisdictional High Court of Gujarat given in the case of Sarjan Realities Ltd. [2014 (8) TMI 206 - GUJARAT HIGH COURT] In so far as the rate of interest at 18% considered to be excessive, the Co-ordinate Bench in the case of Vipul Y. Mehta (2010 (7) TMI 1051 - ITAT AHMEDABAD) has held that the payment of interest @ 18% per annum to the relatives on unsecured loans cannot be said to be excessive or unreasonable. - Decided in favour of assessee.
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