The assessee borrowed in his personal capacity and utilized the same in his business activities. Therefore, he claimed the interest paid as a deduction against the head income from other sources. Further the assessee also deducted TDS from all the payees and amount of interest were also paid to account payee cheque only. However, the AO disallowed the claim, without disputing the genuineness of the loan transaction. The CIT(A) confirmed the addition made by the AO on two counts i.e. the assessee not utilized the entire interest bearing borrowed funds for the purpose of making investment and the interest amount ‘appeared’ to be very high. However, the CIT(A) did not give any strong reason for such conformance of addition. On appeal before the Hon’ble ITAT, it was observed that the AO and CIT(A) ignored many material facts and financial statements of the assessee and held that the assessee had successfully proved the authenticity of the loan taken and interest paid thereon. Thereby the Hon’ble ITAT deleted the addition made.  (AY. 2009-10)