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Disallowance U/s. 40A(2)(b) on account of Interest @ 18% – Held not excessive
Case Law Details
- Case Name
- M/s. Shivam Cotton Corporation Vs Addl. CIT (ITAT Indore)
- Appeal Number
- Only available for paid members
- Date of Judgement/Order
- Only available for paid members
- Related Assessment Year
- 2008- 09
- Courts
- All ITAT, ITAT Indore
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Issue – The assessee claimed that the assessee borrowed unsecured loan @ 18% from related as well as unrelated parties. Therefore, the rate of 18% cannot be said to be excessive. Reliance was placed upon the decision in the case of Balkrishna Goyal vs. DCIT, I.T.A. No. 590/Ind/2009, wherein it was held that 18 % interest from the related party is not excessive or unreasonable. On the other hand, the ld. Sr. DR defended the addition by contending that from the bank loan is available at the lesser rate.
The facts in brief are that the assessee declared income of Rs. 48,13,806/- ...
