2018 (4) TMI 1355 - AT - Income Tax

Addition u/s 68 - unexplained share premium received - admission of additional evidence - Held that - As could be seen from the facts on record, there appears to be a valid reason for inability of the assessee in producing supporting documentary evidences to prove the genuineness of the share premium which the assessee has now sought to produce before us by way of additional evidences under rule 29 of the Rule, 1963. We are inclined to admit the additional evidences produced by the assessee, since, in our view such evidences may have a crucial bearing for deciding the issue in dispute. However, considering the fact that these additional evidences were not filed either before the Assessing Officer or before the Commissioner (Appeals), the Department must also be given a fair chance to examine and verify the authenticity of the additional evidences furnished by the assessee for deciding the genuineness of the share premium received. - Decided in favour of assessee for statistical purposes

Summary

Issues: Delay Condonation, Addition of Unexplained Cash Credit under Section 68, Mismatch in Income

Delay Condonation:
The appeal involved a delay of 68 days in filing, with the assessee attributing the delay to the State Bank of India's recovery proceedings, which led to the closure of the business premises and the unavailability of staff to compile details for the appeal. The Tribunal, after considering submissions, condoned the delay, noting the reasonable cause behind it and admitted the appeal for adjudication.

Addition of Unexplained Cash Credit under Section 68:
The primary issue was the addition of ?5 crore as unexplained cash credit under section 68 of the Income Tax Act. The Assessing Officer treated the share premium received as unexplained cash credit due to lack of evidence provided by the assessee, leading to the addition in the income. The Commissioner (Appeals) not only upheld the addition but also enhanced it. The assessee faced difficulties in furnishing details due to the State Bank of India's actions, resulting in a lack of response to queries. The Tribunal decided to admit additional evidence crucial for proving the genuineness of the share premium and restored the issue to the Assessing Officer for fresh adjudication.

Mismatch in Income:
Another issue involved an addition of ?6,65,902 due to a mismatch in income as shown in the Profit & Loss account and as per 26AS. The Tribunal decided to restore this issue to the Assessing Officer for reconciliation, allowing the relevant grounds raised by the assessee for statistical purposes. The Assessing Officer was directed to provide a reasonable opportunity for the assessee to be heard before deciding on the issues.

In conclusion, the Tribunal allowed the assessee's appeal for statistical purposes, emphasizing the need for a fair chance for both parties to present evidence and address the issues effectively. The judgment highlighted the importance of providing necessary details and evidence to support claims and the significance of fair adjudication processes in tax matters.