TMI Blog2010 (5) TMI 823X X X X Extracts X X X X X X X X Extracts X X X X ..... lant revenue has proposed the following question: Whether, on the facts and in the circumstances of the case, the Appellate Tribunal was right in law in confirming the order of the CIT(A) deleting the disallowance made on account of excess interest payment for ₹ 56,63,131/- in view of section 40A(2)(a) of the Act? (2) The Assessment Year is 1997-98 and the relevant accounting period ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 2)(a) of the Act. Revenue carried the matter in appeal before the Tribunal, but failed. (3) Mrs.M.M.Bhatt, learned Senior Standing Counsel for the appellant has submitted that both, Commissioner (Appeals) as well as the Tribunal were not justified in deleting the addition inasmuch as no evidence had been produced to substantiate rate of interest @ 24% p.a. (4) A perusal of the order of Commi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... in the matter by assuming that the provisions of Section 40A(2) (a) of the Act could be applied in the present case. The Tribunal has recorded that the Assessing Officer has inferred that the rate of 24% p.a. was excessive as the assessee had paid interest at rates varying from 18% to 20% p.a. on its other borrowings, that is, the deposits from public and loans from financial institutions. It was ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nal have upon appreciation of the evidence on record found that the revenue has not been able to make out any case for applying the provisions of section 40A(2)(a); and that interest on unsecured borrowings is always higher than the rate of interest paid to the banks or financial institutions from where the loans raised are secured loans, and have accordingly accepted interest paid to Sun Pharmace ..... X X X X Extracts X X X X X X X X Extracts X X X X
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