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2018 (2) TMI 1917 - ITAT JAIPURAddition u/s 68 - unsecured cash credit - HELD THAT:- There is no discussion regarding confirmation being filed by these shareholders representing 55% of the share transaction in the assessment order. Notwithstanding the same, nothing has been brought to our notice which demonstrates that these confirmations were filed by the assessee company and accepted by AO during the course of assessment proceedings. Further, we donot agree with the contentions of the ld AR that the addition has been made by the AO merely for want of confirmation from these nine persons. AO has stated clearly in his findings that even though the assessee has furnished details of share capital and share premium, it has not furnished the confirmation and other details with regard to investment made in share capital and premium receipts from nine specified persons amounting to ₹ 81,84,399/-. AO that it is necessary for the assessee to prove prima facie the transaction which resulted in share application and share premium by submitting proof which includes proof of the identity, capacity of the creditor or their share holder and lastly, the genuineness of the transaction. As stated by the AO that merely establishing the identity of the creditor or the transaction have been routed through bank instruments is not enough. As per AO that assessee has not complied with the legal obligation to explain the source of share application money and the premium and even the confirmations have not been furnished and the amount was accordingly treated as unexplained and added to the income of the assessee u/s 68 We deem it appropriate to set aside the matter to the file of the AO to examine the same afresh taking into consideration the above discussions. In the result, ground of assessee’s appeal is allowed for statistical purposes. Disallowance of power charges - AO held that the said sum relates to preceding year and the same was disallowed and added to the income of the assessee - HELD THAT:- There is no dispute that the year in which the liability has crystallized, the assessee shall be eligible to claim the same. However, from the material available on record, it is not clear whether the assessee has claimed the same in the earlier years to which the said payment originally belongs and whether the same was allowed for tax purposes. If it was already claimed and allowed in the earlier years, the AO is right in disallowing the same. Where it was not claimed and not allowed in the earlier years, the assessee shall be eligible to claim the same in the year under consideration. The matter is accordingly set-aside to the file of the AO to examine the said aspect of the matter and decide the same afresh. In the result, the ground is allowed for statistical purposes. Estimating of gross profit rate - rejection of books of accounts u/s 145(3) - HELD THAT:- Pursuant to rejection of books of accounts u/s 145(3) of the AO, the AO has estimated the G.P rate of 1.84% as shown in the case of M/s Seth Alloys Pvt ltd, Bhiwadi which is claimed to be carrying on the same nature of business as that of the assessee and has applied the same on the estimated turnover of ₹ 4.50 crores. The turnover so estimated by the AO is not under challenge before us. Regarding the estimation of G.P rate, the AO has applied the G.P rate as that of M/s Seth Alloys Pvt ltd, Bhiwadi. We agree with the contention of the ld AR that where any third party material is used against the assessee, the assessee should be provided an opportunity to rebut the same. We accordingly set aside the matter to the file of the AO for the limit purposes of disclosing the details of M/s Seth Alloys Pvt ltd, Bhiwadi as available on record and after allowing an opportunity to the assessee to examine the said details and provide its rebuttal, decide the same afresh. In the result, the ground of appeal is partly allowed for statistical purposes.
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