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TMI Blog1976 (6) TMI 43X X X X Extracts X X X X X X X X Extracts X X X X ..... Officer asked the assessee to produce the vouchers. The assessee produced the books of accounts, but did not produce the vouchers and consequently, the Income-tax Officer did not accept the book results and added Rs. 5,000 during the asst. years 1968-69 and 1969-70 and Rs. 2,500 during the asst. year 1970-71. 2. On appeal the Appellate Asstt. Commissioner again asked the assessee to produce the vouchers. The assessee claimed that he produced the books of accounts and vouchers and the same were examined by the Appellate Asstt. Commissioner and he did not find any fault with it. However, the Appellate Asstt. Commissioner has stated that the assessee did not produce all the vouchers and he, therefore, sustained the additions made by the Inc ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to cover up the possible leakages and he did not find any defect with the books of accounts of the assessee, and the vouchers. As the assessee has produced the books of accounts and vouchers and no defect was pointed out, the additions could not be sustained. Accordingly, the additions are deleted. 5. The next objection of the assessee is about the addition of Rs. 3,000 being cash credit during the asstt. year 1968-69 and the disallowance of interest thereon. The Income-tax Officer found a cash credit of Rs. 3,000 in the name of Smt. Sumitra Devi. No confirmation letter was filed before the Income-tax Officer, on the plea that the address of the lady is not traceable. Accordingly, the Income-tax Officer, treated the cash credit of Rs. 3, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... essee on interest. She withdrew the amount when she needed it for the marriage of her daughter. From the statement of the lady the genuineness of the loan is proved. Consequently, we delete the addition of Rs. 3,000 and we allow interest paid thereon. 8. The next objection of the assessee is about disallowance of interest of Rs. 4,000, 4,400 and Rs. 4,000 in three years respectively. The assessee was constructing a building. He borrowed funds for the purpose of his business, but, however, the admitted fact is that the fund so borrowed was diverted in part for the purpose of the construction. The Income-tax Officer observing that the funds have not been used for the purposes of business, disallowed the interest payment thereon at Rs. 4,000 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... that the interest was disallowed not only because the fund was used for the construction of the building but it was also partly used for the domestic expenses. This fact was explained by the assessee in course of the argument. The assessee stated that a part of the borrowed fund was utilised for the construction of the building. For the domestic expenses, the assessee withdrew money from his capital account and, therefore, the view taken by the Income-tax Officer is incorrect. In this connection the assessee also filed, the detais of the amount withdrawn from the borrowed fund. After examining the statement of the assessee we accept his arguments and consequently direct the Income-tax Officer to allow deduction for the interest from the pr ..... X X X X Extracts X X X X X X X X Extracts X X X X
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