TMI Blog2020 (10) TMI 616X X X X Extracts X X X X X X X X Extracts X X X X ..... een utilized by the assessee for purchase of land in question. Prima facie, it appears that the assessee has made investment during the year in the current assets which is more than the borrowed funds, therefore, the borrowed funds was utilized by the assessee for the current assets and not for the acquisition of the land in question. While passing the order under section 154 AO has not issued any notice to the assessee and without giving an opportunity of hearing to the assessee the disallowance is made. Disallowance made by the AO on account of proportionate interest expenditure is highly arbitrary and not justified. The same is deleted. - Decided in favour of assessee. - ITA No. 172/JP/2019 - - - Dated:- 13-10-2020 - SHRI VIJAY PA ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rdance with the law and the same needs to be deleted. 3. Without prejudice to above, it is submitted that company is running in profit and there are adequate equity capital and reserve and surplus (₹ 347.18 lacs as on 31.3.2012), etc. and investment in land was made out of such funds and had no link to borrowed funds. Thus, the disallowance of interest made is not correct and same needs to be deleted. 4. That the appellant reserves his right to add, alter, amend all or any grounds of Appeal before or at the time of hearing. The hearing of the appeal is concluded through Video Conference due to prevailing condition of COVID 19 pandemic. 2. None appeared on behalf of the assessee when this appeal was called for hear ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ,65,000/- of the land purchased by the assessee during the year under consideration. The ld. CIT (A) has confirmed the order of the AO while passing the impugned order in para 2.3 as under :- 2.3. I have perused the facts of the case, the rectification order and the submissions of the appellant. It is seen that assessee has purchased a piece of land this year and as per Assessing Officer borrowed funds were utilized for purchasing it. Interest to the extent of borrowed funds used for the same was not disallowed. Accordingly, Assessing Officer passed order under section 154 of the I.T. Act, 1061 and disallowed a sum of ₹ 3,15,300/-. The assessee contended that it is acquired out of its own funds not borrowed funds and that a deba ..... X X X X Extracts X X X X X X X X Extracts X X X X
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