TMI Blog2016 (4) TMI 1428X X X X Extracts X X X X X X X X Extracts X X X X ..... derations, it typically carried a lower rate of interest. In the instant case, the appellant has taken unsecured loan and an appropriate comparison would have been the rate prevalent in the market vis-a-vis unsecured loan. Apparently, the appellant has stated that the prevailing market rate of interest on unsecured loans was 24%. However, nothing has been brought on record by the AO to suggest what the appellant has stated to be incorrect or there is a better comparison which is available. We have gone through the judgement of Ramesh Chand (HUF) [ 2013 (2) TMI 151 - PUNJAB HARYANA HIGH COURT] wherein addition was made in appellant's case because of higher rate of interest paid by appellant to his mother as against market rate. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... assessee against the order of CIT(A), Alwar dated 27.04.2015 wherein the assessee has taken following grounds of appeal: The ld. CIT(A) has erred on facts and in law confirming the disallowance of Rs. 2,26,176/- on account of interest on unsecured loans paid in excess of 18% to the persons specified u/s 40A(2)(b) of the IT Act. 2. Briefly the facts of the case are that the assessee company has paid interest at the rate of 21% on unsecured loans to the persons specified u/s 40A(2)(b). The AO has found the same to be excessive and has disallowed interest paid in excess of 18% and made an addition of Rs. 2,26,176/- in the hands of the appellant. 2.1 Being aggrieved, the assessee carried the matter in appeal before the ld CIT(A) who ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... specified persons u/s 40A(2)(b) of the IT Act. Also, our attention was drawn to the decision of Jaipur Bench in case of Ram Avtar Garg (ITA no. 58/JP/2010). 2.3 The ld DR supported the order of the lower authorities and in support, drawn attention of the Bench to the decision of Hon ble Punjab and Haryana High Court in case of Ramesh Chand(HUF) V. CIT 217 Taxman 75. 2.4 We have gone through the rival submissions and the perused the material on record. It is noted that disallowance of Rs. 2,26,176/- has been made by the AO on account of excessive interest @ 21% paid to the persons specified u/s 40A(2)(b) of the IT Act. The AO thereafter gave a show cause notice to the appellant as to why the interest payment made to specified persons o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ade in appellant's case because of higher rate of interest paid by appellant to his mother as against market rate. The High Court confirmed the addition on the ground that since transaction in question was not a genuine and bona fide transaction, Tribunal was justified in confirming addition of interest paid on old loan at higher rate of interest by applying provisions of section 40A(2)(b) and no question of law arises. In the instant case, there is no such allegation or finding of the lower authorities that the subject loan transaction was not a genuine transaction. Hence, this decision is no help to the Revenue. We have also gone through the decision of Hon ble Gujarat High Court in case of Aditya Medisales Ltd (supra) and finds th ..... X X X X Extracts X X X X X X X X Extracts X X X X
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