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Interest on Loan cannot be disallowed on mere assumptions
Case Law Details
- Case Name
- Subhakaran Sampatlall (HUF) Vs ITO (ITAT Kolkata)
- Appeal Number
- Only available for paid members
- Date of Judgement/Order
- Only available for paid members
- Related Assessment Year
- 2007-08
- Courts
- All ITAT, ITAT Kolkata
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Subhakaran Sampatlall (HUF) Vs ITO (ITAT Kolkata)
The issue under consideration is whether the AO is correct in disallowing the net interest as debited to Profit & Loss A/ c of the proprietary concern?
In the present case, it is noted that the assessee has received deposit from several persons (details set out by AO at page 2 & 3 of his order) and paid to them interest @ 12.2% and has lent/given loan @ 7.25% and 10%. The AO has made the disallowance of interest by taking note that the assessee has taken deposit at 12.2% and has given loan at 7.25% and 10%, [which comes to an average i...
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