Section 40A(2): ITAT Allows High Interest Payment for Commercial Expediency

Shantiniketan Properties Pvt. Ltd. Vs ACIT (ITAT Delhi) In a significant ruling, the Income Tax Appellate Tribunal (ITAT) Delhi in the case of Shantiniketan Properties Pvt. Ltd. vs. ACIT held that higher tax rate of interest payments made under commercial expediency does not attract disallowance under Section 40A(2) of the Income Tax Act. The ruling emphasizes the significance of commercial considerations and the absence of loss to tax revenue in such scenarios. The case came to the tribunal due to an appeal against the disallowance of interest paid on loans obtained from corporate entities. T...