The learned authorised representative submitted that the assessee had paid interest on unsecured loans at 15 per cent. and 16 per cent. and the Assessing Officer has allowed interest only at 14.75 per cent. and has disallowed the balance holding the same to be excessive. The learned authorised representative submitted that private loans obtained by an assessee always carry higher rate of interest and the action of the Assessing Officer in comparing the interest rate paid by the assessee with the bank rate was not justified. It was submitted that the learned Commissioner of Income-tax (Appeals) has also dismissed this around of appeal.
Sec. 36(1)(iii) & 37 of income Tax Act, 1961—Business Expenditure— When appropriate evidence was adduced, it was not in the power of the Assessing Officer to arbitrarily disallow any item of expenditure on the ground that the sums were not verifiable and there was no indication as to what step was taken by the Assessing Officer to have those expenses verified and if the Assessing Officer had not taken pains to have the expenses verified, he could not disallow any portion of the expenditure on the ground that it was not verifiable, thus, the expenses were to be allowed. - INDIAN COATING & LAMINATING CORPORATION V/s DEPUTY CIT - [2019] 76 ITR (TRIB) 320 (ITAT-LUCKNOW)
The learned authorised representative submitted that the assessee had paid interest on unsecured loans at 15 per cent. and 16 per cent. and the Assessing Officer has allowed interest only at 14.75 per cent. and has disallowed the balance holding the same to be excessive. The learned authorised representative submitted that private loans obtained by an assessee always carry higher rate of interest and the action of the Assessing Officer in comparing the interest rate paid by the assessee with the bank rate was not justified. It was submitted that the learned Commissioner of Income-tax (Appeals) has also dismissed this around of appeal.
Sec. 36(1)(iii) & 37 of income Tax Act, 1961—Business Expenditure— When appropriate evidence was adduced, it was not in the power of the Assessing Officer to arbitrarily disallow any item of expenditure on the ground that the sums were not verifiable and there was no indication as to what step was taken by the Assessing Officer to have those expenses verified and if the Assessing Officer had not taken pains to have the expenses verified, he could not disallow any portion of the expenditure on the ground that it was not verifiable, thus, the expenses were to be allowed. - INDIAN COATING & LAMINATING CORPORATION V/s DEPUTY CIT - [2019] 76 ITR (TRIB) 320 (ITAT-LUCKNOW)