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2017 (9) TMI 571 - AT - Income TaxDisallowance of interest expenses u/s 40A(2)(b) - amount received being unsecured loan - Held that:- As both the authorities below have not commented upon as to how Sh. Udai Kant Mishra would be covered under the provisions of sec.40A(2)(b). However, having seen the pattern of shareholding, and after taking into consideration the totality of facts and judicial pronouncements, we are of the considered view that the reasonable rate of interest ought to have been adopted at 14% against 12.5% as adopted by the AO in view of the fact that the amount so received being unsecured loan. Moreover, the AO has not given any finding with regard to the market value of the interest which is sine qua non for making disallowance under sec.40A(2)(b). In view of the above observation, the AO is hereby directed to re-compute the disallowance. The ground of the assessee’s appeal is partly allowed for statistical purposes
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