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Issues:
1. Justification of passing ex-parte order by CIT(A) and deciding the appeal on merits. 2. Addition of Rs. 2,000 towards the travelling expenses of the directors of the company under rule 6D of the Rules. Analysis: Issue 1: The appeal was made against the order of the CIT (Appeals)-VI, Bombay, who dismissed the appeal of the assessee. The assessee, a company, sold various vehicles to Mahindra Family Trust, and the ITO made ad hoc additions to the sale price of these vehicles. The CIT(A) decided the appeal as ex-parte and upheld the additions. The assessee contended that the ex-parte order was unjustified as no proper opportunity of being heard was given. The Tribunal held that the CIT(A) was justified in passing the ex-parte order as the assessee failed to appear on the date of hearing without sufficient cause, despite being served with a notice. Therefore, the Tribunal upheld the ex-parte order and decision on merits. Issue 2: Regarding the addition of Rs. 2,000 towards the travelling expenses of the directors under rule 6D, the Tribunal found in favor of the assessee. The Tribunal noted that the sales to Mahindra Family Trust were genuine, and the ITO did not conclude them as fictitious. As the assessee had the right to sell its assets below market price, the ITO could not question the sale price. The Tribunal held that no addition should be made to the sale price of the vehicles. Additionally, the Tribunal found that the travelling expenses of the directors were justified based on the proviso to rule 6D, which allowed a higher daily allowance for journeys to metropolitan cities. Therefore, the Tribunal deleted the additions made by the authorities below in respect of both the travelling expenses and the ad hoc additions to the sale price of the vehicles. In conclusion, the appeal was partly allowed, with the Tribunal ruling in favor of the assessee on both issues raised in the case.
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