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of <h1>ITAT directs fair opportunity for appellant in tax appeal, emphasizing due process and right to be heard</h1> <h3>M/s Polo Leasing & Finance Versus ITO, Ward-14 (3) New Delhi</h3> M/s Polo Leasing & Finance Versus ITO, Ward-14 (3) New Delhi - TMI Issues involved:1. Enhancement of income by CIT(A) against facts and circumstances of the case.2. Denial of reasonable opportunity to show cause against enhancement.3. Disallowance of direct expenses debited to P&L A/c.4. Incorrect enhancement of income by CIT(A).5. Disallowance of entire direct expenses without basis.6. Exceeding powers in enhancing disallowance of direct expenses.7. Confirmation of commission rate on total bank deposits.8. Sustaining addition of commission by applying 2% rate.9. Levying interest under sections 234S & 34B.Detailed Analysis:1. The appeal was against the CIT(A) order enhancing the income. The appellant contended that the enhancement was unjustified and lacked a reasonable opportunity for explanation. The CIT(A) made additions to the income based on disallowed direct expenses and commission rates on bank deposits.2. The case was reopened based on information regarding accommodation entries. The appellant failed to attend hearings, leading to an estimated income by the Assessing Officer. The CIT(A) upheld the additions citing lack of evidence and non-compliance by the appellant.3. Dissatisfied with the CIT(A) order, the appellant argued that the estimation lacked basis and was arbitrary. The CIT(A) upheld the Assessing Officer's additions and further enhanced the income by disallowing direct expenses of Rs.60,01,218, as the appellant failed to provide details or evidence for these expenses.4. The appellant challenged the order before the ITAT, claiming non-receipt of the enhancement notice and lack of opportunity to present their case. The ITAT noted the short period between notice and order, concluding that the appellant was not afforded a reasonable opportunity as required by law.5. The ITAT allowed the appeal for statistical purposes, directing the case to be re-adjudicated by the CIT(A) to provide the appellant with a fair opportunity to present their case. The judgment emphasized the importance of due process and the right to be heard in tax matters.This summary provides a detailed analysis of the legal judgment, covering all the issues involved and the respective arguments presented by the parties.
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