Home Case Index All Cases Income Tax Income Tax + AT Income Tax - 2019 (5) TMI AT This
Forgot password New User/ Regiser ⇒ Register to get Live Demo
2019 (5) TMI 1966 - AT - Income TaxDisallowance interest expenditure - estimating reasonable rate of interest @ 12% in contrast to actual rate of interest paid @ 15% without finding the reasons for unreasonableness of the interest rate at prevailing market rate - HELD THAT:- We find that the AO has disallowed interest expenditure in aggregate paid on loans received from relatives. It is found that the assessee has taken loan from the relatives @15%, whereas similar money has been simultaneously stood invested by way of loans and advances on which interest @ 12% p.a. has been charged. We notice from the concurrent orders of the AO and CIT(A) that no proper justification has been given by the assessee for borrowals at a higher rate and corresponding lending at a lower rate. Clearly the excess interest paid to the relatives qua the loans and advances do not appear to carry attributes of commercial expediency. Therefore, the Revenue authorities were justified in making disallowance of excess interest expenditure. We thus find no infirmity in the order of the CIT(A) and hence, decline to interfere. Penalty u/s 271D - contravention of provisions of section 269SS - matter of accepting unsecured deposit in cash from Wife of the Appellant - HELD THAT:- We find that assessee has supported the receipt of cash from wife by way of documentary evidences and bonafides of action. The transaction has been done with spouse and claimed that the assessee was under bonafide belief that transaction with intimate person could not attract mischief of provisions of action u/s 269SS - The aforesaid contention of the assessee pleading bonafide cannot be brushed aside summarily having regard to conventional constructs and postulations which define Indian socio-eco structure. Thus, in the absence of any doubt cast towards bonafides of such small amount of loan, mere breach of section 269SS is to be regarded as technical or venial in nature in the given circumstances. We therefore find adequate justification in the plea of the assessee for setting aside the imposition of penalty u/s 279D of the Act in this regard. AO is likely directed to delete the penalty on this score.
|