2024 (5) TMI 1113 - AT - Income Tax

Best judgement u/s 144 - Addition of Depletion in value of investment Debit balance written off Amount disallowable u/s 40(a) Unsecured loans - HELD THAT - The assessee has not brought any material contradicting the finding of the AO. Even it is found that Auditor of the assessee himself recorded about the depletion in value of investment being capital in nature debit balance being capital in nature and disallowance made u/s 40(a) of the Act and disallowance made u/s 14A of the Act. The assessee grossly failed to bring on records material evidence contradicting the findings of AO on impugned additions. In the absence of any contrary material filed by the assessee and the assessee failed to get confirmation of the unsecured loan taken from the concerned parties we do not see any reason to interfere in the findings of AO the same is hereby affirmed. Appeal of the assessee is dismissed.

Issues Involved:
1. Dismissal of the appeal by Ld. CIT(A)-V, New Delhi.
2. Reasonable cause for non-attendance by the appellant.
3. Decision without discussing the merits of the case.
4. Disallowance of Rs. 1,22,76,000/- on account of depletion in value of investments.
5. Disallowance of Rs. 84,00,000/- on account of debit balances written off.
6. Disallowance of Rs. 92,415/- u/s 40(a) of the Income Tax Act, 1961.
7. Addition of Rs. 1,09,630/- u/s 14A of the Income Tax Act, 1961.
8. Addition of Rs. 1,21,47,451/- on account of unsecured loans u/s 68 of the Income Tax Act, 1961.
9. Levy of interest u/s 234B, 234D, and 244A of the Income Tax Act, 1961.

Summary of Judgment:

1. Dismissal of the Appeal by Ld. CIT(A)-V, New Delhi:
The appeal was dismissed due to non-prosecution as the appellant failed to appear before the Ld. CIT(A) despite multiple opportunities.

2. Reasonable Cause for Non-Attendance:
The appellant claimed to be prevented by reasonable cause from attending the appellate proceedings, but no substantial evidence was provided to support this claim.

3. Decision Without Discussing the Merits:
The Ld. CIT(A) dismissed the appeal without discussing the merits due to the absence of representation and supporting evidence from the appellant.

4. Disallowance of Rs. 1,22,76,000/- on Account of Depletion in Value of Investments:
The AO disallowed the claim as the appellant treated it as non-allowable in the original return and failed to provide reasons for the deduction. The auditor also reported it as a capital expenditure.

5. Disallowance of Rs. 84,00,000/- on Account of Debit Balances Written Off:
The AO disallowed the claim as it did not meet the conditions of section 36(1)(vii) r.w.s. 36(2) of the Act. The auditor classified it as a capital expenditure.

6. Disallowance of Rs. 92,415/- u/s 40(a) of the Income Tax Act, 1961:
The AO disallowed the amount due to non-deduction of TDS, and the appellant did not provide any reason for the claim despite multiple opportunities.

7. Addition of Rs. 1,09,630/- u/s 14A of the Income Tax Act, 1961:
The AO made the addition as the appellant failed to rebut the findings and did not submit any reply to the show-cause notice. The disallowance was computed as per Rule 8D of the IT Rules.

8. Addition of Rs. 1,21,47,451/- on Account of Unsecured Loans u/s 68 of the Income Tax Act, 1961:
The AO added the amount as the appellant failed to provide confirmations and details of the unsecured loans. The auditor also did not support the appellant's claim.

9. Levy of Interest u/s 234B, 234D, and 244A of the Income Tax Act, 1961:
Interest was charged as per the provisions of the Act, and penalty proceedings u/s 271(1)(c) were initiated separately.

Conclusion:
The appeal of the assessee was dismissed due to the lack of representation and failure to provide evidence contradicting the AO's findings. The Tribunal affirmed the AO's decision and dismissed the grounds raised by the assessee.

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