RPS FARMS & EXPORTS (P) LTD,NAMAKKAL vs. ACIT, CIRCLE-1, NAMAKKAL

The assessee filed this appeal against the order of the Commissioner of Income Tax (Appeals), Salem in Appeal No.278/2015-16 dated 21.02.2019 for the assessment year 2013-14.

M/s. R P S Farms & Exports (P) Ltd., the assessee, filed additional evidences consisting of returns of income, confirmation letters, etc., under Rule 29 of ITAT Rules, 1963, submitting that during the course of assessment as well as appeal proceedings, the assessee could not produce the returns of income of the person who subscribed for shares of the company and also confirmation letters of the said persons to prove the sources of those persons. Since, these documents are relevant for deciding the issue and non-admission of them would put the assessee to great hardship and irreparable loss and non-filing of these documents before the lower authorities are not willful or wanton, it was pleaded that these documents may be admitted as additional evidences and the appeal be allowed to be decided on merits.

We heard the rival submissions and admitted the additional evidences, as they are integral to the issues on appeal.

The ld.AR pleaded that the assessee company received Rs.67 lakhs, in cash from four persons viz., S/Shri/Mrs. S. Sellammal, P. Nallappan, S. Sasikumar and S. Gomathi towards share application money between 17.01.2013 and 14.03.2013. Out of which, Rs.28 lakhs was credited in the balance sheet as “Share application money” and Rs.38,30,000/- under the head “Other current liabilities”. They were repaid to those persons during the assessment year 2014-15 through banking channel. While completing the assessment, the AO treated the share application money as unexplained credit U/s.68 and on appeal, the ld.CIT(A) confirmed the same. The ld.AR pleaded that on basis of copies of returns of income and confirmation letters filed by the persons, the impugned appeal may be allowed. Per contra, the ld.DR supported the orders of the lower authorities.

We heard the rival submissions. Since the additional evidences are admitted which requires examination, we deem it fit to remit these impugned issues back to the AO for a fresh examination. The assessee shall lay all materials in support of its contention before the Assessing Officer and comply with the requirements of the Assessing Officer in accordance with law. The Assessing Officer is free to conduct appropriate enquiry as deemed fit, however, he shall furnish due opportunity to the assessee on the materials etc., to be used against the assessee and on due consideration of the assessee’s clarification / explanation shall pass the order in accordance with law.

In the result, the assessee’s appeal is treated as partly allowed for statistical purposes.