AJAY KUMAR MITTAL, J. - (1.) THIS appeal has been preferred by the assessee under Section 260A of the Income Tax Act, 1961 (in short, "the Act") against the order dated 31.7.2012, Annexure A.3 passed by the Income Tax Appellate Tribunal, Chandigarh Bench ­ 'B', Chandigarh (in short, "the Tribunal") in ITA No.577/Chd/2012, for the assessment year 2008 -09, claiming following substantial questions of law: - "i) Whether the learned authorities below have justified to reduce the rate of interest on mere assumptions and not fixing a fare market rate by holding proper enquiry in view of section 40A(2b) of the Act? ii) Whether the learned authorities below were justified by not following the principle of consistency as the said rate of interest had been accepted from the assessment year 2000 -01 to 2007 -08 without there being any change of circumstances? iii) Whether the learned ITAT was justified in dismissing the appeal of the assessee by not recording the arguments and not considering the judgments submitted by the assessee? iv) Whether in the facts and circumstances of the case, the action of the authorities below, the impugned orders Annexures A.3 and A.5 are legally sustainable in the eyes of law -
(2.) BRIEFLY , the facts necessary for adjudication of the controversy involved, as available on the record are that the assessee is engaged in trading in C.R. Iron sheet and cycle parts. It filed its return of income for the assessment year 2008 -09 on 16.8.2008 showing income of Rs. 10,85,910/ - which was processed under section 143(1) of the Act. Subsequently the case was selected for scrutiny. Notice under Section 143(2) dated 14.9.2009 was issued and served on the assessee on 15.9.2009. Notice under Section 142(1) of the Act dated 31.5.2010 was also issued and served on the appellant on 7.6.2010. The assessee filed its written statement. The Assessing Officer vide order dated 10.12.2010, Annexure A.1, after examining the record held that the assessee had paid the interest on unsecured loans at a higher rate to his family members as compared to the others and reduced the rate of interest from 18% to 12% only. Feeling aggrieved, the assessee filed appeal before the Commissioner of Income Tax (Appeals -II) [CIT(A)]. Vide order dated 14.3.2012, Annexure A.2. the CIT (A) partly allowed the appeal by increasing the rate of interest on unsecured loans from 12% to 15%. Still not satisfied, the assessee filed appeal before the Tribunal. Vide order dated 31.7.2012, Annexure A.3, the Tribunal dismissed the appeal. Thereafter, the assessee filed a miscellaneous application dated 12.7.2012 for recalling the order dated 31.7.2012, Annexure A.3 to the effect that the arguments raised by it had neither been considered nor appreciated by the Tribunal. It was further submitted that for invoking Section 40A(2), it was mandatory for the Assessing Officer to establish the market rate which was neither done by the Assessing Officer nor by the CIT(A). The said application was dismissed by the Tribunal vide order dated 3.4.2013, Annexure A.5. Hence the present appeal by the assessee. Learned counsel for the assessee -appellant submitted that no enquiry was held before the interest paid to the relatives was disallowed under Section 40A (2) (b) of the Act. The Assessing Officer had adopted 18% to be reasonable rate of interest for other years and there was no occasion for him to have adopted different approach in this year. It was urged that the Tribunal had also accepted 24% to be reasonable interest in various cases and therefore disallowance of interest in the present case beyond 15% was unjustified.
(3.) AFTER hearing learned counsel for the appellant, we do not find any merit in the appeal.;