S. 40A(2)(b) Interest on loan @ 12% paid to related party can’t be considered as excessive

CIT(A) found force in the submission of the assessee that the interest at the rate of 12% was also taken as reasonable in the Income Tax Act under the provisions of section 40A(b)(iv) for the purpose of calculating interest to the partners. The CIT(A) also followed the decision of the Tribunal in the case of ACIT Vs. M/s. Raj Steel Industries and Vipul Y. Mehta Vs. ACIT (supra) where the rate of interest at 18% to 24% was considered to be reasonable. ITAT find no error in the order of the learned CIT(A) and in our considered opinion, section 40A(2)(b) empowers the AO to disallow expenditure p...