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TMI Blog2021 (6) TMI 341X X X X Extracts X X X X X X X X Extracts X X X X ..... eal: 1. The learned CIT(A) has erred both in law and on the facts of the case in confirming the action of the AO of making a disallowance u/s.40A(2) of the Act of interest of Rs. 34,79,788/- as being excessive and unreasonable. 2. Alternatively and without prejudice, the learned CIT(A) has erred both in law and on the facts of the case in confirming addition u/s.40A(2) of the Act made by the AO without determining the fair market rate of interest. 3. Both the lower authorities have passed the orders without properly appreciating the facts and they further erred in grossly ignoring various submissions, explanations and information submitted by the appellant from time to time which ought to have been considered before passing the impu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... st amounting to Rs. 34,79,788/- to the total income the appellant. 3. Against the order of the Assessing Officer, assesse filed first statutory appeal before the Ld. CIT(A) who confirmed the addition made by the Assessing Officer on the ground that assesse has been failed to justification paying of higher interest rate as compared to other parties. 4. Now assesse has come before us and filed by way of second statutory appeal. 5. We have heard both the parties and gone through the relevant record and impugned order. In this case, Ld. A.O mentioned that Ld. A.R. on behalf of the assesse agreed at Rs. 34,79,788/- . Thereafter assesse contested before the Ld. CIT(A) by submitting that it has not accepted the addition. 6. On the other hand, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sed. 9. We draw support from a Gujarat High Court judgment in the matter of CIT vs. Sarjan Realities Ltd. wherein it is held: I. Section 40A(2), of the Income-tax Act, 1961 - Business disallowance - Excessive or unreasonable payments (Interest Payment) - Assessment year 2009-10 - Assessing Officer opined that interest paid to threerelated companies at rate of 12 per cent was excessive and unreasonable - However, looking at prevalent market rate, aforesaid interest paid could not be said to be excessive and unreasonable - Whether solely because assessee had paid interest at different rates to different parties, that itself could not be a ground to come to conclusion that payment of interest to related companies at rate other than that pai ..... X X X X Extracts X X X X X X X X Extracts X X X X
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