Payment of little higher rate of interest on unsecured loans justified as it involves lesser formalities

DCIT Vs. M/s. Ahmedabad Strips P. Ltd. (ITAT Ahmedabad)  We have duly considered rival contentions and gone through the record. There is no dispute with regard to the fact that creditors do fall within the category of specified persons contemplated in section 40A(2)(b) of the Act. Short question before us is, whether payment of interest at the rate of 18% to such persons on the loans availed from them is excessive or not, having regard to the fair market value of such loans. No doubt, the AO took into consideration interest rate at 12%. This is the rate on which banks used to grant small tim...