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2016 (3) TMI 825 - AT - Income TaxDisallowance u/s 40A - CIT(Appeals) restricted the rate of interest to 15% as against 18% claimed by the assessee and 12% allowed by the Assessing Officer - Held that:- The loans were taken from the same persons/relatives. It is true that for the purpose of disallowance under sect ion 40A(2) of the Act, the guiding factor is whether the expenditure is excessive or unreasonable, having regard to the fair market value of the case, services or facilities for which the payment has been made. In our opinion, it is a matter of common knowledge that the interest on unsecured loan is normally more than the interest payable on secured loans. In the case of market loans, no security is given and no paper or other formalities are required to be completed. The unsecured loan is also available at the call and convenience of the assessee as and when required. Keeping in view the peculiar facts and circumstances of the present case, we are of the view that the disallowance sustained by the ld. CIT(Appeals) is unwarranted and hence, we delete the same. - Decided in favour of assessee
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