TMI Blog2013 (5) TMI 50X X X X Extracts X X X X X X X X Extracts X X X X ..... provisions of Section 40A(1) was essentially a question of fact. As decided in Upper India Publishing House (P) Limited v. CIT [1978 (12) TMI 2 - SUPREME COURT] that the question whether a particular expenditure or loan was excessive and unreasonable, was essentially a question of fact and did not involve any issue of law. Thus in view of the authoritative pronouncement by the Supreme Court on ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nce of interest under Section 40A(2) of the Income Tax Act (hereinafter referred to as ''the said Act''. We have heard the learned counsel for the parties after notice. The Assessing Officer had made an addition of Rs. 18,57,189/- under Section 40A(2) of the said Act on account of excessive interest having been paid by the respondent / assessee to his relatives. There is no dispute that the loan ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... for the respondent /assessee contended that these loans, which had been taken by the assessee from the relatives, were unsecured loans. He submitted that by the very nature, such loans entail a much higher rate of interest. He submitted that banks would not lend money without security and if unsecured loans are raised in the market, the rate of interest would be much higher than 18%. It is only be ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the Supreme Court observed that the question whether a particular expenditure or loan was excessive and unreasonable, was essentially a question of fact and did not involve any issue of law. In view of the authoritative pronouncement by the Supreme Court on the issue of expenses being excessive or not in terms of Section 40A(2) of the said Act, we feel that the present question sought to be rais ..... X X X X Extracts X X X X X X X X Extracts X X X X
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