Higher interest rate on unsecured loan taken for commercial expediency is admissible

Jignesh Sevantilal Shah Vs ITO (ITAT Ahmedabad) ITAT Ahmedabad held that unsecured loan taken at higher rate for commercial expediency is admissible under section 57(iii) of the Income Tax Act. Facts- During the course of assessment proceedings, the AO observed that the assessee had taken loan of Rs. 1 crore from one party to whom interest @ 21% per annum was given. Before the AO, the assessee submitted that the purpose of incurring such high interest on loan taken was owing to commercial expediency. However, the AO rejected the contentions of the assessee on the ground that assessee paid an e...