2012 (9) TMI 227

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..... 1 to 4, the assessee challenged the addition 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 c....

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....sessment year under appeal. Therefore, no loan is 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 PB-4 is the capital account of the assessee in which during the assessment year under appeal, the assessee has withdrawn Rs.20,81,116/-, which is also available to the assessee for making investment in the property.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 i....