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TMI Blog2012 (9) TMI 227X X X X Extracts X X X X X X X X Extracts X X X X ..... of Rs.1,89,658/- made by the AO u/s. 36(1)(iii) of the IT Act treating the proportionate investment made towards purchase of property out of borrowed funds. According to the AO, the assessee had made the investment in two properties, i.e., property at Transport Nagar and at Business Park Town Planners, Delhi for Rs.7,88,000/- and Rs.7,92,487/- respectively totaling to Rs.15,80,487/- in his personal capacity. The assessee had debited interest of Rs.8,95,679/-, as the assessee during the year had availed loan facility of Rs.76,48,377/- from the bank. The assessee explained that borrowed funds were utilized for the purpose of business and the investment was made in the properties in his personal capacity out of funds available with the assess ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... taken in the assessment year under appeal. PB-4 is the capital account of the assessee in which during the assessment year under appeal, the assessee has withdrawn Rs.20,81,116/-, which is also available to the assessee for making investment in the property. The ld. DR, however, pointed that the assets are not shown in the balance sheet. It has no relevance in the matter in issue because the investment has been made in personal capacity. No reasons have been shown as to why proportionate interest has been disallowed in this case when sufficient capital withdrawals and taxable income is available to the assessee for the purpose of making investment in the property. Hon'ble Bombay High Court in the case of CIT vs. Reliance Utilities and Power ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ted by the auditor and all the expenses are incurred for the business purpose, which is supported by the bills and vouchers. Therefore, adhoc addition is unjustified. The ld. CIT(A), considering the explanation of the assessee, restricted the disallowance of Rs.30,000/-. 7. On consideration of the above facts, we do not find any justification to sustain part of the addition on this issue. The AO merely stated in the order that some of the expenses were not verifiable in proper manner from the bills/vouchers. It would mean that the assessee produced all the bills and vouchers in respect of the expenses. Nothing is pointed out specifically in the assessment order as to which of the expenses are not verifiable. Adhoc addition is made ..... X X X X Extracts X X X X X X X X Extracts X X X X
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