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2015 (10) TMI 2850 - AT - Income TaxAddition u/s 40A - assessee had paid excessive interest - this interest was @ 12% paid to depositors who are not family members, 15% to relatives and 18% to the associated concern - AO adopted uniform interest rate in all the above three categories to be @ 15% resulting in the impugned disallowance - HELD THAT:- We find that the hon’ble jurisdictional high court in Sarjan Realities Ltd.[2014 (8) TMI 206 - GUJARAT HIGH COURT] holds that solely because an assessee had paid an interest to different parties would not itself be a ground to come to conclusion that payment of interest to related companies at rate other than that paid to other parties was excessive and unreasonable resulting in section 40A(2)(b) addition in question. We reiterate that neither of the lower authority gives an independent finding of such an excessive component over and above the prevailing market interest rate. The Revenue fails to point out any distinction on facts or law. We accept assessee’s arguments and delete the impugned addition - Assessee’s appeal is allowed.
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