TMI Blog2010 (1) TMI 1213X X X X Extracts X X X X X X X X Extracts X X X X ..... -1-2010 arising out of the order of the Assessing Officer under Section 143(3) of the Income Tax Act, 1961. 2. The ground no.1 of the assessee's appeal reads as under: 1. The learned Commissioner of Income Tax (Appeals) has erred in law and on facts in upholding the disallowance of interest of ₹ 1,31,682/- made by the assessing officer u/s.40A(2)(b) by computing interest @ 12% as ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e Tribunal held that market value of the services and not the individual action of the assessee has to be looked into wile making the disallowance under Section 40A(2)(a) of the Act - market rate of interest @ 24% held to be reasonable. It was pointed out by the learned counsel that in the immediately preceding year, the interest paid to the relatives at the rate of 18% was duly allowed by the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t paid at the rate of 18% per annum by the assessee to the relatives cannot be said to be unreasonable or excessive. Moreover, the AO himself has accepted the interest at the rate of 18% to be reasonable in the immediately preceding year, therefore, the same rate of interest cannot be become excessive ITA.No.901/Ahd/2010 in the subsequent year. In view of the above, we delete the disallowance of & ..... X X X X Extracts X X X X X X X X Extracts X X X X
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