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2021 (6) TMI 341 - AT - Income TaxAddition u/s 40A(2) - assessee has paid interest to certain related parties and treated interest rate @ 15% reasonable and disallowed excess rate paid to related parties u/s.40A(2) - HELD THAT:- When a person takes a loan from anyone it depends upon time and circumstances on which interest rate can be determined. In case if anyone to swipe credit card from an ATM and withdraw money out of ATM he has to pay interest rate between 30% to 36% and at a same time, if he approaches credit card issuing bank/NBFC though it takes 2 to 3 days’ time in that case credit card holder is liable to pay interest rate @ 15% to 24% however different banks/NBFC’s are having different interest rates for business loan if any one require loan in emergency from local money lenders then in that case one has to pay interest rate between 48% to 60%. So in our considered opinion in this case difference of interest which was received by the assessee or paid by it is just 1.25% per annum so same cannot be termed as unreasonable. We allow appeal of the assessee.
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