Unsecured Loan from relatives cannot be equated with Bank Loan

DCIT Vs. Prem Kumar Gupta (ITAT Delhi) Hon’ble Delhi ITAT held that there is difference between loan taken from Banks and unsecured loans taken from the relatives. In the case of unsecured loans from the relatives, no formalities and bank guarantee have to be given. Thus the Hon’ble Tribunal has held 15% interest paid on unsecured loans taken as  highly reasonable. In the instant case,the  assessee had paid interest @ 15% per annum to the persons covered under section 40A(2)(b) of the I.T. Act. The same was disallowed by the Ld AO by treating it as excessive. It was argued that...