TMI Blog2016 (5) TMI 1287X X X X Extracts X X X X X X X X Extracts X X X X ..... /07/1968 debars the Assessing Officer from not allowing such payment made to relatives and sister concerns, where there is no attempt to evade the tax - Decided in favour of assessee - ITA No. 466/MUM/2013 - - - Dated:- 18-5-2016 - Shri Mahavir Singh, Judicial Member And Shri Rajesh Kumar, Accountant Member. Appellant by : Shri Haresh Purushottamdas Shah Respondent by : Shri Premand J. ORDER PER MAHAVIR SINGH, J.M: This appeal by assessee is arising out of order of CIT(A)-24, Mumbai in Appeal No.CIT(A)-24/JCIT 13(2)/147/11-12 order dated 18/10/2012. Assessment was framed by JCIT, Range-13(2), Mumbai for the assessment year 2009-10 under section 143(3) of the Income Tax Act, 1961 (hereafter referred as the Act ) vi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... persons specified u/s 40A(2)(b) was not excessive and unreasonable in light of the opinion of the Assessing Officer that the interest at the rate of 12% was reasonable and the findings of the Hon'ble Tribunal in the case of the assessee itself for the A.Y. 2004-05 on the same set of facts. Charging of interest at a given rate from trade debtors cannot be taken to be the market rate for the purposes of loans since these are not comparables. The assessee has not been able to demonstrate as to how the interest rate of 18% was the market rate . Aggrieved, now assessee is in second appeal before the Tribunal. 5. We have heard the rival contentions and gone through the facts and circumstances of the case. Before us, Ld. Counsel for th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... incurred wholly and exclusively for the purpose of business and the lower authorities have not elaborated that how this expenditure of interest is excessive or unreasonable having regard to the fair market value of the goods, services or facilities for which the payment is made. 6. On the other hand, Ld. Sr.DR argued that this issue is covered by the Tribunal s order in assessee s own case for assessment year 2004- 05 and which has been followed in assessment year 2005-06, 2006-07, 2007-08 and 2008-09. According to him, the disallowance made by the Assessing Officer and confirmed by CIT(Appeals) is perfectly as per the provisions of the Act. 7. We have gone though the details of interest paid to the family members and noticed that the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... limits or bank loans, which includes some other hidden charges and it is also fact that bank while sanctioning loan put quite onerous liabilities like submission of stock statements, project report by Chartered Accountant, timely payment of instalments and also satisfactory securities of equal amount or more of loan. According to Ld. Counsel for the assessee this loan taken from bank is for fixed period and payment is made by the end of the period with constant monitoring and checks. Whereas, the loan from the family members and relatives can be obtained and returned without any hustles so there is premium on the same and this a normal market practice. We find that the assessee has tried to explain his case from all angles and moreover the ..... X X X X Extracts X X X X X X X X Extracts X X X X
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