D.K. Cold Storage & General Mills, Aligarh V. ITO, Bulandshahr

ITA 5111/DEL/2014

• Counselvise Citation: 511120114 RSA 2014
• Duration Of Justice: 1 year(s) 28 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 14-10-2015
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: SMC 2
• Next Hearing Date: 10-08-2015
• Assessment Year: 2009-2010
• Appeal Filed On: 16-09-2014
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Assessee Lawyers: RAJIVE BANSAL
• Keywords: Fair market value

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH SMC - 2 , NEW DELHI BEFORE SHRI J. SUDHAKAR REDDY, ACCOUNTANT MEMBER ITA NO. 511 1 /DEL/201 4 AY: 20 0 9 - 10 D.K.COLD STORAGE & GENERAL MILLS VS. ITO, WARD 1 C/O M/S RAJIVE BANSAL & CO. BULANDSHAHR BANSAL BHAWAN, RAILWAY ROAD ALIGARH PAN: AACFD 2811 L (APPELLANT) (RESPONDENT) APPELLANT BY : SH.RAJIVE BANSAL, C.A. RESPONDENT BY : S MT. RAKHI VIMAL, JCIT ORDER THIS IS AN APPEAL FILED BY THE ASSESSEE AGAINST THE ORDER DT. 07.07.2014 OF LD.CIT(A) , MEERUT FOR ASSESSMENT YEAR 20 0 9 - 10 . THERE IS A DELAY OF 01 DAY FOR FILING OF T HE APPEAL, THE SAME IS CONDONED AND APPEAL ADMITTED. 2. THE SOLE ISSUE THAT HAS TO BE ADJUDICATED BY ME IS THE DISALLOWANCE OF 6% INTEREST PAID , U/S 40A( 2 )(B) OF THE INCOME TAX A CT, 1961 (THE ACT ) . THE ASSESSEE PAID 18% INTEREST ON LOANS TAKEN FROM TWO PERSONS WHO ARE ADMITTEDLY COVERED WITHIN THE AMBIT OF S.40A( 2 ) OF THE ACT. THE A.O. WAS OF THE VIEW THAT INTEREST RATE OF 12% IS THE FAIR MARKET VALUE FOR INTEREST ON LOAN AND HENCE HE DISALLOWED 6% OF THE INTEREST CLAIMED AS EXCESSIVE PAYMENT. THE LD.CIT(A) UPHELD THE SAME. 3. I AM OF THE CONSIDERED VIEW THAT THE DISALLOWANCE IS NOT CALLED FOR, AS THE INTEREST RATE OF 18% ON UNSECURED LOANS IS FAIR AND REASONABLE. ITA 5111/DEL/2014 A.Y. 2009 - 10 DK COL STORAGE & GENERAL MILLS 2 BORROWIN G FROM BANKS CARRIES INTEREST COST S OF AROUND 15% TO 18%. UNDER THESE CIRCUMSTANCES THE CLAIM OF THE ASSESSEE IS JUSTIFIED. IN THE RESULT THE DISALLOWANCE IS DELETED AND THE APPEAL OF THE ASSESSEE IS ALLOWED. 4. IN THE RESULT, THE APPEAL BY THE ASSESSEE STANDS ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT ON 14 TH OCTOBER ,2015. SD/ - (J.SUDHAKAR REDDY) ACCOUNTANT MEMBER DATED: THE 14 TH OCTOBER , 2015 *MANGA COPY OF THE ORDER FORWARDED TO: 1. APPELLANT ; 2.RESPONDENT; 3.CIT; 4.CIT(A); 5.DR; 6.GUARD FILE BY ORDER ASST. REGISTRAR