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2012 (9) TMI 227

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..... tion made to cover possible leakages - Held that:- 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. Therefore, the addition is clearly unjustified - Decided in favor of assessee - ITA No. 49/Agra/2012 - - - Dated:- 20-7-2012 - SHRI BHAVNESH SAINI, AND SHRI A.L. GEHLOT, JJ. Appellant by : Shri Rajendra Sharma, Advocate. Respondent by : Shri A.K. Sharma, Jr. D.R. ORDER Per Bhavnesh Saini, J.M.: This appeal by the assessee is directed against the order of ld. CIT(A), Agra dated 02.11.2011 for the assessment year 2007-08. 2. We have heard the ld. representatives of both the parties, per .....

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..... ions cited by the AO are not applicable to this case. Therefore, the addition is unjustified. The ld. CIT(A) confirmed the addition and dismissed the appeal of the assessee. 4. After considering the rival submissions, we are of the view that the addition is clearly unjustified. PB-1 is the computation of income, in which during the assessment under appeal, the assessee has taxable income of Rs.27,79,603/- after deductions claimed and the capital account of the assessee has capital of Rs.60.58 lacs as on 31.03.2007 (PB-2). No loan was taken during the assessment year under appeal because as per Annexure to the balance sheet on 31.03.2007 (PB-5), unsecured loans have been mentioned at Rs.74,94,914/- and in the preceding assessment year endi .....

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..... ssee had sufficient funds for the purpose of making investment in the properties and no evidence has been brought on record by the AO to prove if the assessee made investment in the property out of borrowed funds. Therefore, in absence of any nexus between the investment and the borrowed funds, there is no justification for the AO to make proportionate disallowance out of interest. We, therefore, set aside the orders of the authorities below and delete the addition of Rs.1,89,658/-. Resultantly, ground Nos. 1 to 4 of the appeal of the assessee are allowed. 6. On ground No.5, the assessee challenged the disallowance of Rs.30,000/- out of expenses. The AO noted that some of the expenses were not verifiable in a proper manner from bills/vouc .....

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