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2024 (6) TMI 980 - AT - Income TaxIssues Involved: The issues involved in this case include dismissal of appeal on Ex-parte basis, incorrect addition under section 43CA, disallowance of interest on unsecured loans, sufficiency of working capital, and excessive additions without sufficient time for defense. Dismissal of Appeal on Ex-parte Basis: The appellant filed an appeal against the order of the ld. CIT(A) but it was dismissed ex-parte without considering a valid adjournment application based on medical grounds. The CIT(A) failed to provide a proper opportunity for the appellant to be heard and did not adjudicate on the merits of the case. The order passed in undue haste was non-speaking and did not discuss the reasons for agreeing with the assessment order. The Tribunal held that the Commissioner (Appeals) is duty-bound to dispose of the appeal through a speaking order on merits, considering all points for determination, and providing adequate opportunity for the appellant to present their case. Incorrect Addition under Section 43CA: The Assessing Officer made an addition under section 43CA of the Act, totaling Rs. 26,32,067, which the CIT(A) upheld. The appellant argued that the AO wrongly added this amount without considering that the flats were sold before the amendment u/s 43CA and the stamp duty value should be based on the date of allotment/agreement. The CIT(A) failed to take into account the relevant details provided during the assessment proceeding, leading to an incorrect finding of law. The Tribunal emphasized the importance of considering all relevant factors before making such additions. Disallowance of Interest on Unsecured Loans: Another issue was the disallowance of excess interest of 6% out of 18% paid on unsecured loans used for business purposes. The CIT(A) upheld this disallowance, stating that the interest rate was reasonable and that the appellant had sufficient working capital. However, the Tribunal found that the CIT(A) erred in upholding this disallowance without considering the business needs and the reasonableness of the interest rate. The Tribunal emphasized that the AO is not the competent authority to assess the business expediency of the appellant. Sufficiency of Working Capital: The CIT(A) also upheld the incorrect finding of the AO regarding the appellant's working capital, without proper assessment of the business needs. The Tribunal noted that the AO is not authorized to determine the business expediency of the appellant, and the CIT(A) should have considered all relevant factors before making a decision. The Tribunal emphasized the importance of providing a fair opportunity for the appellant to present their case and address all issues related to working capital. Excessive Additions without Sufficient Time for Defense: The appellant argued that the additions upheld by the CIT(A) were highly excessive and contrary to facts, law, and principles of natural justice. The Tribunal noted that the appellant was not given sufficient time and opportunity to address the reasons relied upon by the AO for making these additions. The Tribunal highlighted the need for a fair and thorough assessment of all relevant factors before making additions to the appellant's income.
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