Interest on Unsecured Loan- Proprietorship

This query is : Resolved

CA Sanjay Baheti (Querist)
Follow

09 August 2010 My Assessee has paid intt. @ 18p.a. on unsecured loan. can A.o. restrict the same to 15 p.a. Please provide reference to case law also, if available, to defend the assessee.

Aditya Maheshwari

Aditya Maheshwari (Expert)
Follow

09 August 2010 It should be accordingly to the prevailing market rates. If the same is followed then allowable otherwise not.

CA SURENDRA KUMAR RAKHECHA

CA SURENDRA KUMAR RAKHECHA (Expert)
Follow

09 August 2010 Agreed with Aditya.

But if the assessee can prove the following then he can fight the case in appeal and will easily win :

1. When the Business is new.

2. The assessee is not having good reputation in the market ( business is small).

3. There was an immediate need of the funds.

4. The assessee was not in a position to bargain with rate of interest.

5. The funds were acquired for short period (if situations are alike this).

6. There were immediate/likely rise in the prices of the raw materials/shortage of raw materials hence assessee wanted to make a good inventory to get benefit of the positive market scenario.

You need to be the querist or approved CAclub expert to take part in this query .
Click here to login now

Join the CA Students WhatsApp Community for ICAI Updates, Trending Courses & Notes!

Similar Resolved Queries

Unanswered Queries

Popular
Recent

Trending Online Classes

Direct Tax Laws & International Taxation May 26,Sept 26 & Jan 27

CA Arvind Tuli

Enroll Now
Audit Fast Track Recorded Batch For May 26,Sept 26 & Jan 27

CA Aarti Lahoti

Enroll Now
DT & Audit (Exam Oriented Fastrack Batch) - For May 26 Exams and onwards Full English

CA Bhanwar Borana & CA Shubham Keswani

Enroll Now

view all classess

Meet our CAclubindia PRO Members

DHANASHRI KARMARKAR

CA Aakarsh Jain

Michael & Co.

divakar podaturu

sachingurav

Subscribe Now

Interest on Unsecured Loan- Proprietorship

Similar Resolved Queries

Trending Online Classes

Meet our CAclubindia PRO Members

Quick Links

Browse by Category

Latest Job Openings

Senior Executive

Manager- Finance and Compliance

GST CONSULTANT

GST CONSULTANCY

Accountant

CA Final

Article Assistant

Associate CA