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TMI Blog2010 (12) TMI 1357X X X X Extracts X X X X X X X X Extracts X X X X ..... onal interest on interest free advance of Rs.1,10,143/- to Shri Atulkumar Bhagwanjibhai. The learned CIT(A) has erred in confirming it. 3. The learned assessing officer has erred in law and on facts in making disallowance of Rs.12,19,193/- on account of interest paid to persons covered u/s 40A(2)(b). The learned CIT(A) has erred in confirming it." 3. We have heard Shri Vimal Desai, the ld.AR of the assesse and Shri Avinash Kumar, the ld.DR. 4. With regard to ground No. 1 we find that there is no dispute that the assessee has not charged interest on the loan advanced to Shri Atulkumar Bhawanjibhai. The CIT(A), following the order passed by the CIT(A)- IV, Ahmedabad for the assessment year 2000-01 has upheld the order of assessing of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... o made by the assessee during the year. No contrary decision was brought to our knowledge by the learned DR. We, therefore, delete the disallowance of Rs.54,812. Thus, this ground stands allowed." There being no change in the facts and circumstances on the issue during the year under consideration, we are at a loss to find a different view than the one already arrived at by the coordinate bench of the Tribunal on the same set of facts and circumstances. In this view of the matter we direct the assessing officer to delete the addition. Ground No.1 of the assessee succeeds. 5. With regard to ground No.2 pertaining to disallowance of interest of Rs.1,19,193 paid to persons covered u/s 40A(2)(b) we find that this issue is also covered in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rate of interest and the assessee may be in need of the money for the purpose of business, it does not mean that the assessee may pay the interest only at such rate of interest at which he has already taken the money from some other parties earlier./ In our opinion, no thumb rule can be laid down that the interest will be paid by the assessee at a particular rate of interest. Under the facts and circumstances of the case, in our opinion, the rate of interest paid by the asserswsee4 was reasonable and no disallowance is called for." Consistent with the precedent, we direct the assessing officer to delete the disallowance. The second ground of the assessee is allowed. 6. In the result, appeal filed by the assessee is allowed. Order pr ..... X X X X Extracts X X X X X X X X Extracts X X X X
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