2023 (4) TMI 294

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....business u/s. 44AD of the Income Tax Act, 1961 (hereinafter called 'the Act') and had also claimed as deduction an amount of Rs.16,61,550/- u/s. 57 of the Act on account of interest paid to Bank on overdraft facility. The case was selected under the norms for limited scrutiny through CASS and the assessee was required to explain why the interest paid and claimed as deduction u/s. 57 of the Act might not be disallowed. As per the assessment order, the assessee sought an adjournment for a week to respond but even after completion of one week's time, the assessee did not furnish any response. Therefore, the Assessing Officer proceeded to complete the assessment ex-parte qua the assessee and noted that since the assessee had failed to substanti....

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.... expenditure incurred in relation to business income which has been offered to tax by the assessee u/s 44AD of the Income Tax Act, 1961. 4. Because the learned CIT(A), NFAC failed to appreciate that the loan taken by the assessee in the name of its proprietary concern from Corporation Bank has been given to M/s Diamond Infra-promoters Private Limited and consequently interest paid by the assessee to Corporation Bank is allowable as deduction from interest earned from M/s Diamond Infra-promoters Private Limited u/s 57(iii) of the Income Tax Act, 1961. 5. Because the learned CIT(A). NFAC ought to have allowed interest expense of Rs. 16,61,550/- paid to Corporation Bank under section 57 of the Income Tax Act, 1961 from intere....

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....her ground that may be taken at the time of hearing." 5. At the outset, the ld. Authorized Representative submitted that both the assessment order as well as the impugned order had been passed ex-parte qua the assessee. He prayed that the assessee should be given an opportunity to present his case before the Assessing Officer. The ld. AR also gave an undertaking before this Court that if given an opportunity, the assessee will definitely cooperate during the assessment proceedings. 6. Per contra, the ld. Sr. DR strongly opposed the assessee's prayer and argued that the assessee had so far not cooperated either in the assessment proceedings or in the proceedings before the ld. First Appellate Authority and, therefore, such conduct shou....