SH. BHAGWAN KUMAR TAPARIA,NAGAUR vs. DCIT, CENTRAL CIRCLE-1, JODHPUR, JODHPUR

IN THE INCOME TAX APPELLATE TRIBUNAL JODHPUR BENCH, JODHPUR BEFORE DR. MITHA LAL MEENA, HON’BLE ACCOUNTANT MEMBER AND SHRI SUDHIR PAREEK, HON’BLE JUDICIAL MEMBER ITA Nos. 134, 135, 136, 137, 138, 139/Jodh/2025 (Assessment Years: 2014-15 to 2019-20) Bhagwan Kumar Taparia DCIT, Central Circle-1, Kalani & Co., Chartered Accountants, 5th Floor, Milestone Building, Jodhpur Gandhinagar Turn, Tonk Road, Jaipur - 302015 PAN No. AAFPT 6058 A ITA Nos. 306 & 328 /Jodh/2025 (Assessment Years: 2018-19 & 2019-20) Joint Commissioner of Income Tax Bhagwan Kumar Taparia (OSD Central Circle – 1, Jodhpur) Plot No. 40-44 and 7A, Basni Road, TRF Industrial Area, Nagaur, Rajasthan – 341001 PAN No. AAFPT 6058 A Assessee By Sh. P.C. Parwal, CA (virtual) Revenue By Sh. Anil Kumar Bharadwaj, CIT (Virtual) Date of Hearing 29 / 04 / 2026. Date of Pronouncement 21 / 05 / 2026. ORDER PER BENCH: These appeals by the assessee and the department are filed against the separate order of the Ld. Commissioner of Income Tax, Appeal, Jaipur-5 [hereinafter referred to as the “CIT(Appeals)”] with respect to assessment year 2014-15 to 2019-20.

2 ITA No. 134 to 139/JODH/2025 ITA No. 306 and 328/JODH/2025 (Assessment Year 2014-15 to 2019-20) 2. The issued raised in the grounds of appeal in the different assessment years by the assessee and the department are connected to a search conducted at the business and residential premises of the assessee and therefore these appeals of the assesse and the department are heard together and disposed of by this consolidated order for the sake of brevity.  The appellant assessee has raised following grounds of appeal: ITA No. 134/Jodh/2025 1. The Ld. CIT(A) has erred on facts and in law in confirming the addition of Rs. 11,50,000/- on the basis of Exhibit 7 of Annexure AS by treating the same as commodity income by holding that the date mentioned against the amount of Rs.11,50,000/- is 09.09.2013 which falls in the year under consideration without appreciating the explanation of assessee that against the amount of Rs. 11,50,000/- description mentioned is opening balance (09.09.213) which is the date of start of noting of transaction in this diary whereas the opening balance of Rs. 11,50,000/- represent the accumulated balance of earlier year and is not the income of the assessee for the year under consideration. 2. The Ld. CIT(A) has erred on facts and in law in holding that the assessee's claim for set off of the amount of Rs.40 lacs received back by S.L. Cotton Pvt. Ltd. on repayment of loan is not acceptable as cash received on repayment of loan relates to S.L. Cotton Pvt. Ltd. & not to the assessee and no document was found in search to prove that this amount has been utilized in the hands of assessee ignoring that assessee is Director of the company. 3. The assessee craves to amend, alter and modify any of the grounds of appeal. 4. The appropriate cost be awarded to the assessee. ITA No. 135/Jodh/2025 1. The Ld. CIT(A) has erred on facts and in law in confirming the addition of Rs.23,80,000/- u/s 68 of the Act by treating the unsecured loan raised from Emrald Commercial Ltd. as unexplained and bogus even when no incriminating material to support the presumption of AO was found in search and the loan is subsequently repaid.

3 ITA No. 134 to 139/JODH/2025 ITA No. 306 and 328/JODH/2025 (Assessment Year 2014-15 to 2019-20) 2. The Ld. CIT(A) has crred on facts and in law in confirming the addition of Rs.17,850/- u/s 69C of the Act on account of alleged commission paid on the alleged accommodation entry for bogus unsecured loan. 3. The Ld. CIT(A) has erred on facts and in law in confirming the 3 disallowance of interest of Rs.42,957/- paid on the above unsecured loan. 4. The Ld. CIT(A) has erred on facts and in law in confirming the addition of Rs.2,80,000/- on the basis of Exhibit 7 of Annexure AS by treating the same as commodity income by not accepting the explanation of assessee that this amount represents amount received from the cash kept at home and therefore the same is not the commodity income. 5. The assessee craves to amend, alter and modify any of the grounds of appeal. 6. The appropriate cost be awarded to the assessee. ITA No. 136/Jodh/2025

4 ITA No. 134 to 139/JODH/2025 ITA No. 306 and 328/JODH/2025 (Assessment Year 2014-15 to 2019-20) as bogus is also available with the assessee for making reinvestment as he is the director of the company. 2. The assessee craves to amend, alter and modify any of the grounds of appeal. 3. The appropriate cost be awarded to the assessee. ITA No. 139/Jodh/2025

 The Department has raised following grounds of appeal:

ITA No. 306/Jodh/2025 1. Whether on the facts & in the circumstances of the case, the Id. CIT(A) has deleted the addition of Rs. 16,12,500/- made on account of u/s 68. Further, the amount of Rs. 14,58,500/- is allowed to set off against subsequent investment is not acceptable with the reason that the Id. CIT(A) is ignoring the facts enumerated by the AO and material available on record 2. Whether on the facts & in the circumstances of the case, the Id. CIT(A) has unaccounted interest u/s 68 of Rs. 1,80,000 restricted to 26,000/- is not acceptable with the reason that the Id. (CIT) is ignoring the facts enumerated by the AO and the material available on record 3. Whether on the facts & in the circumstances of the case, the Id.. CIT(A) has considered undisclosed investment of income of Rs. 2,58,00,000/- is restricted to 46.50, 135/- is not acceptable with the reason that the Id. CIT(A) is ignoring the facts enumerated by the AO and material available on record 4. The Appellant craves, leave or reserves the right to amend modify, alter add or forego any ground(s) of appeal at any time before or during the hearing of this appeal ITA No. 328/Jodh/2025

5 ITA No. 134 to 139/JODH/2025 ITA No. 306 and 328/JODH/2025 (Assessment Year 2014-15 to 2019-20) 1. Whether on the facts & in the circumstances of the case, the Id. CIT(A) is justified in restricting the addition of Rs. 2,35,00,000/- to Rs. 1,03,74,195/- without appreciating the fact that during the assessment proceedings there was no correlation as sought by the assessee with other disclosure or detection of undisclosed income of other premises and concerns of which the assessee is not proprietor/director 2. Whether on the facts & in the circumstances of the case, the Id. CIT(A) is justified in restricting the addition of R. 23,48,857/- to Rs. 14,83,293/- without appreciating the fact that 2 the assessee did not offer any plausible explanation including any documentary evidence in support of his contention that this much excess gold jewellery value of Rs. 23.48,867/- may also be held as a reasonable possession of the family. 3. Whether on the facts & in the circumstances of the case, the ld. CIT(A) is justified in deleting the addition of Rs. 6,63,867/- without appreciating the fact that the assessee did not produce any plausible explanation including any documentary evidence in support of availability of silver bullion and utensils worth of Rs. 6,63,867/- 4. Whether on the facts & in the circumstances of the case, the Id. CIT(A) is justified in restricting the addition of Rs.92,57,960/- to Rs. 91,01,054/- without appreciating the fact that during the assessment proceedings it is revealed that, the 4 assessee is indulged in commodity trading, despite being asked to produce 'Contract Notes' and details of brokers through whom these transactions were carried out at which platform viz. NCDEX MCX is not produced at the time of assessment proceedings. 5. Whether on the facts & in the circumstances of the case, the ld. CIT(A) is justified in restricting the addition of Rs.23,00,022/- to Rs. 1,84,001/- without appreciating the fact that the assessing officer clearly mentioned that during the assessment proceedings the transaction in the Parchi are not found verified from the books of the assesse 6. Whether on the facts & in the circumstances of the case, the Id. CIT(A) is justified in restricting the addition of Rs.16,15,050/- to Rs. 38,99,000/- without appreciating the fact that during the assessment proceedings the undisclosed income to the tune of Rs. 46,16,050/-have been included in his purported disclosure for which the A/R of the assessee has not adduced any explanation as to why the same were not included at the time of assessment proceedings, 7. The Appellant craves, leave or reserves the right to amend modify, alter add or forego any ground(s) of appeal at any time before or during the hearing of this appeal. 3. We have heard both the sides, perused the material on record, impugned order, assessment order and case law cited before us.

6 ITA No. 134 to 139/JODH/2025 ITA No. 306 and 328/JODH/2025 (Assessment Year 2014-15 to 2019-20) 4. Briefly the facts as per record are that assessee started the business of manufacturing of cotton cake/ oil and mustard cake/ oil in his proprietary concern M/s Subh Laxmi Oil Industries in the year 1993-94 which was converted into a company M/s S.L. Nutrition Pvt Ltd., in the year 2017. Besides the business of cotton cake/oil and mustard oil & cake, he also carried out commodity transaction in cotton/ mustard seed, oil and cake. Certain papers indicating income from commodity business are also found in the course of search conducted on 30.01.2019.

4.1 Consequent to search, the assessee has prepared cash flow statement and also worked out his undisclosed income from the various documents found and seized by the department along with year wise cash inflow/outflow statement showing income and utilization worked out based on the seized document (APB, Pg.142). The Ld. AR explained that All the investment/ expenses / cash found during search were made out of the commodity income /interest income/amount received from soap factory. In view of the seized documents, income for various assessment years works out as under:-

Interest Commodity Commodity Interest Income from Income as Income as Income as A.Y. Mani on the Total per Seized per Ex-1, per diary basis of seized Diary Ex-7 Ex-2 & Ex-3 Ex-7 documents 2014-15 89,19,350 - 3,17,000 - 92,36,350 2015-16 21,25,000 - - - 21,25,000 2016-17 16,00,000 - - - 16,00,000

7 ITA No. 134 to 139/JODH/2025 ITA No. 306 and 328/JODH/2025 (Assessment Year 2014-15 to 2019-20) 2017-18 4,70,000 - - 1,80,000 6,50,000 2018-19 10,70,000 - - 1,80,000 12,50,000 2019-20 23,10,000 90,87,410 - - 1,13,97,410 Total 1,64,94,350 90,87,410 3,17,000 3,60,000 2,62,58,760

4.2 The Ld. AR explained that assessee intended to file application before Settlement Commission for settlement of his case and therefore, such income was not disclosed in the return of income filed u/s 153A/139(1) of the Act. However, by Finance Bill 2021, the Settlement Commission was abolished from 01.02.2021. Therefore, the assessee has disclosed the above income by way of letter filed in course of assessment proceeding before the Assessing Officer (in short “the AO”) (APB 144-146) and that the assessee had filed detailed explanation in respect of each issue raised by AO. The AO after considering the submission finally made addition of Rs.6,82,81,608/- over and above the additional income of Rs.2,62,58,760/- offered in assessment proceeding. The summarized position of the year wise additions made by the AO are as under: -

Assessment Year 2014-15 Particular of As per As per AO Addition Reason for addition addition assessee Commodity 10069350 8919350 1150000 The assessee has not Income as per explained the source of Seized Diary Ex- the accumulation of the 7 opening balance as on 09/09/2013 of Rs.11,50,000/- in this diary and nothing has been disclosed about

8 ITA No. 134 to 139/JODH/2025 ITA No. 306 and 328/JODH/2025 (Assessment Year 2014-15 to 2019-20) the cash inflow/outflow for the period prior to 09/09/2013 Interest Income 317000 317000 0 - as per diary Ex-7 Total Addition 1,03,86,350 9236350/- 1150000 Assessment Year 2015-16 Treating the 2380000 0 2380000 AO treated the loan loan as received from Emerald unexplained Commercial Limited as Commission 17450 0 17450 unexplained by treating the same as bogus in on above loan view of the report of Interest on 42957 0 42957 the investigation wing. above loan Commodity 2605000 2125000 480000 Difference is due to not Income as per considering the amount Seized Diary of Rs.2,00,000/- as Ex-7 repayment of the loan given and amount of Rs.2,80,000/- taken from safe box. Total 27,00,907 2125000 29,20,407 Addition Assessment Year 2016-17 Interest on 261680 0 261680 As loan received is unsecured loan treated as bogus in AY taken from 2015-16, the interest is Emerald not allowable. Commercial Limited Commodity 2075000 1600000 475000 The claim of realisation Income as per of the advance given Seized Diary earlier not accepted. Ex-7 Loan Given to 1500000 0 1500000 Not considering the Mani source of loan as out of the income offered and funds as per cash flow statement Total 38,36,680 1600000 22,36,680/- Addition

9 ITA No. 134 to 139/JODH/2025 ITA No. 306 and 328/JODH/2025 (Assessment Year 2014-15 to 2019-20) Assessment Year 2017-18 Interest on 174965 0 174965 As loan received is unsecured loan treated as bogus in AY taken from 2015-16, the interest is Emerald not allowable. Commercial Limited Commodity 4485000 470000 4015000 The AO has not Income as per considered the various Seized Diary entries of expenses and Ex-7 wrongly considered the breakup of the amount in safe box for Rs.34 lacs as income. Interest on 180000 180000 0 Taxing the interest Loan Given to income u/s 115BBE Mani taxing u/s 115BBE Total 48,39,965 650000 4189965 Addition Assessment Year 2018-19 Commodity 1612500 1070000 542500 This represents Income as per repayment of the loans Seized Diary Ex- given earlier and 7 expenses which are considered in cash flow statement. Interest on Loan 180000 26000 154000 Addition made for Given to Mani interest for the entire taxing u/s year whereas the same 115BBE was received back on 22/05/2017 Investment in 25800000 0 25800000 Payment made for purchase of the purchases as per the land agreement. Total Addition 2,75,92,500 1096000 2,64,96,500/- Assessment Year 2019-20 Cash found in 23500000 0 23500000 Not considering the search source of the cash found as per cash inflow/outflow statement.

10 ITA No. 134 to 139/JODH/2025 ITA No. 306 and 328/JODH/2025 (Assessment Year 2014-15 to 2019-20) Gold Jewellery 2348857 0 2348857 227.78 gms Silver Jewellery 663867 0 663867 12.640 kg Commodity 9257960 9087410 170550 This has been Income as per considered in the cash Seized Diary Ex- flow statement. 7 Amount noted on 2300022 0 2300022 - loose slips Noting as per 4615050 2310000 2305050 - Exhibit 7 of Annexure AS Total Addition 4,26,85,756 11397410 3,12,88,346/-

In the 1st ground the appellant challenged that the Ld. CIT(A) has erred on facts 6.1 and in law in confirming the addition of Rs.11,50,000/- on the basis of Exhibit 7 of Annexure AS by treating the same as commodity income by holding that the date mentioned against the amount of Rs.11,50,000/- is 09.09.2013 which falls in the year under consideration.

11 ITA No. 134 to 139/JODH/2025 ITA No. 306 and 328/JODH/2025 (Assessment Year 2014-15 to 2019-20) 6.1.1 At the outset the Ld. AR submitted that the Ld. CIT (A) has not appreciated the explanation of assessee that against the amount of Rs.11,50,000/- description mentioned is opening balance as on 09.09.213 which is the date of start of noting of transaction in this diary whereas the opening balance of Rs.11,50,000/- represent the accumulated balance of earlier year and is not the income of the assessee for the year under consideration. The Ld. AR contended that the AO accepted the income so offered for tax, but he made addition of Rs.11,50,000/- without addressing the submission of the assessee that the aforesaid amount was reflected in the diary as opening balance as on 09.09.2013. The Ld. CIT(A) vide para 4.6, on page 10-13, held that the date mentioned against the amount of Rs.11,50,000/- is 09.0.2013 and therefore, AO has correctly made addition of this amount. However, if the appellant’s claim of Rs.40 lacs received on repayment of alleged accommodation entry relating to S.L. Cotton Pvt. Ltd. is considered, the opening balance of Rs.11,50,000/- would not be added in the year under consideration and therefore, the addition so made by AO and confirmed by Ld. CIT(A) is deserves to be deleted.

6.1.2 The Ld. DR placed reliance on the impugned order.

6.1.3 It is an undisputed fact on record that in the diary Exhibit 7 of Annexure AS, the noting of Rs.11,50,000/- was mentioned as opening balance dated 09.09.2013. It is seen

12 ITA No. 134 to 139/JODH/2025 ITA No. 306 and 328/JODH/2025 (Assessment Year 2014-15 to 2019-20) that 09.09.2013 is the date of the start of noting’s of the entries in the diary wherein the amount of Rs.11,50,000/- can logically be interpreted as opening balance coming from earlier year. This fact has not been considered, addressed or rebutted by the lower authorities. In our view, the opening balance of Rs.11,50,000/- cannot be added in the hands of the assessee for the year under consideration.

6.1.4 We, therefore, hold that the impugned order of the CIT(A) in confirming the addition of Rs. 11,50,000/- is perverse to the facts on record. Accordingly, the addition of Rs. 11,50,000/- made by AO and confirmed by Ld. CIT(A) is deleted. Thus, the ground no. 1 is allowed.

In the 2nd ground, the appellant challenged that the Ld. CIT(A) has erred on facts 6.2 and in law in holding that the assessee’s claim for set off of the amount of Rs.40 lacs received back from S.L. Cotton Pvt. Ltd. on repayment of loan is not acceptable.

6.2.1 The Ld. AR stated that in the search, a hand written diary was found and seized, vide Exhibit 7 of Annexure-AS (APB, Pgs. 80-124). Based on this diary, assessee prepared date wise cash inflow/outflow statement as above, which is reproduced at page 9-10 of the assessment order. The nature wise receipt and investment/expenditure details are also mentioned at page 6-7 of the assessment order. The Ld. AR explained that the

13 ITA No. 134 to 139/JODH/2025 ITA No. 306 and 328/JODH/2025 (Assessment Year 2014-15 to 2019-20) appellant assessee has computed the commodity income based on inventories as per handwritten diary amounting to Rs.89,19,350/- (20,29,350+68,90,000) and interest income of Rs.3,17,000/- which is offered for tax. Thus, the total amount offered is Rs.92,36,350/-.

6.2.2 The Ld. AR contended that the AO accepted the income so offered for tax, but he made addition of Rs.11,50,000/- without addressing the submission of the assessee that the aforesaid amount was reflected in the diary as opening balance on 09.09.2013. The AO has merely stated that assessee has not offered any explanation for the same. Thus, he made addition of Rs.1,03,86,350/- (92,36,350+11,50,000) u/s 68 of the Act.

6.2.3 The appellant had submitted before Ld. CIT(A), that the opening balance of Rs.11,50,000/- noted in the diary on 09.09.2013 was the starting date of recording of transaction in the diary, which represents the accumulative balance of income earned in earlier years and it was not the income of year under consideration. The assessee also claimed that in case of SL Cotton Pvt. Ltd., the AO has made addition on a/c of alleged accommodation entries, out of which Rs.40 lacs were repaid during the year under consideration. If the addition is confirmed in case of SL Cotton Pvt. Ltd, it would mean that Rs.40 lacs is received by the assessee being the key person and director of the company and therefore, set off of the same should be allowed to the assessee.

14 ITA No. 134 to 139/JODH/2025 ITA No. 306 and 328/JODH/2025 (Assessment Year 2014-15 to 2019-20) 6.2.4 The Ld. CIT(A) vide para 4.6, on page 10-13, held that the date mentioned against the amount of Rs.11,50,000/- is 09.09.2013 and therefore, AO has correctly made addition of this amount. However, the claim of Rs.40 lacs received on repayment of alleged accommodation entry relating to S.L. Cotton Pvt. Ltd. was not considered in the hands of the assessee for the reason that no document was found in search that this amount is utilized in the hands of the assessee and that the set off of this amount is already allowed in case of S.L. Cotton Pvt. Ltd. Accordingly, the Ld. CIT(A) reworked out the availability of cash with the assessee at Rs.66,17,000/- and directed the AO to consider the same in the subsequent year.

6.2.5 We find that in the case of S.L. Cotton Pvt. Ltd., AO made addition of loan raised by treating it as accommodation entry which was confirmed by Ld. CIT(A). It is noted that the loans were raised by the company prior to its commercial production on 30.11.2013. Meaning thereby that even if the addition is confirmed by Ld. CIT(A) in case of S.L. Cotton Pvt. Ltd., the amount received on repayment of such loan has to be considered as received by the assessee and therefore, the amount of Rs.40 lacs which is repaid by S.L. Cotton Pvt. Ltd to the appellant has to be considered in the cash flow of the assessee. If the department considers the aforesaid cash availability as on 31.03.2014 with the assessee, the total cash will increase to Rs.1,06,17,000/- as against

15 ITA No. 134 to 139/JODH/2025 ITA No. 306 and 328/JODH/2025 (Assessment Year 2014-15 to 2019-20) Rs.66,17,000/- determined by Ld. CIT(A). Therefore, the appellant would deserve to get the necessary relief of the cash availability as above.

6.2.6 Accordingly, we hold that the Ld. CIT(A) has been factually wrong in reworking of the availability of cash with the assessee at Rs.66,17,000/- as against Rs.1,06,17,000/- as on 31.03.2014 and so directing the AO to consider the same in the subsequent year. This decision of the CIT (A) is unwarranted and as such quashed. Thus, the 2nd ground of appeal is allowed.

ITA No. 135/JODH/2025 (Assessment Year 2015-16)-

7.1 At the time of hearing, the Ld. AR stated that the AO made addition of Rs.23,80,000/- u/s 68 of the Act as per the discussion made at para 4.1, page 5-13 of the assessment order and also made addition of Rs.17,850/- for alleged commission paid and disallowed interest expense of Rs.42,957/- u/s 69C of the Act. The Ld. CIT(A) has confirmed the said addition made vide para 4.6, page 12-18. However, considering the

16 ITA No. 134 to 139/JODH/2025 ITA No. 306 and 328/JODH/2025 (Assessment Year 2014-15 to 2019-20) availability of the funds with the assessee, he has allowed the set off against the addition so confirmed at para 4.8, page 18-20 and thus, the additions were deleted.

7.2 The Ld. AR argued that in the present case, the assessment was completed in the absence of any incriminating material found in search, then how the original assessment can be tinkered with and whether in the absence of any document found in search to prove that loan raised from Emerald Commercial Private limited which was subsequently repaid along with interest is sham transaction, to make the addition.

7.3 The Ld. DR on the other hand relied on the impugned order but he did not controvert contention of the appellant that the assessment was completed in the absence of incriminating material found in search and he did not furnish any distinguishing judgement

7.4 Admittedly, it is an undisputed fact on record that as on the date of search the assessment proceedings for the assessment year under consideration was not pending and that no incriminating material relating to the unsecured loans taken from the Emerald Commercial Private limited was found during the course of search. The AO however observed that after two days of the search of the assessee, a search was carried out at the address of the aforesaid third party company where Shri Indrajit Seth

17 ITA No. 134 to 139/JODH/2025 ITA No. 306 and 328/JODH/2025 (Assessment Year 2014-15 to 2019-20) in his statement mentioned that he has provided accommodation entries to the assessee and the said statement at third party search by third person has been considered by the AO as an incriminating material. The Ld. CIT(A) has observed that report dated 07.12.2016 received from ADIT, Investigation Wing, Kolkata, is not considered by the AO in the original order u/s 143(3) passed in case of SL Cotton Pvt Ltd and statement of Shri Birendra Kumar Taparia recorded u/s 132(4) and statement of Shri Indrajit Seth recorded u/s 131 on 01.02.2019 are sufficient incriminating material to acquire jurisdiction u/s 153A of the Act, without any reference directly or indirectly to any incriminating material found during the course of search.

7.4.1 The Ld. AR argued that the report of ADIT, Investigation, Kolkata, dt. 07.12.2016, was received by the AO on 14.12.2016 and that even if it is presumed that the same escaped the attention of the AO, nothing prevented the department to initiate proceedings u/s 148 of the Act, as this report was much before the date of search. The Ld. AR contended that such report cannot be a basis for making the addition, more particularly, when such report was available to the AO before the assessment made in case of S.L. Cotton Pvt. Ltd. for Assessment Year 2014-15 but, the AO even after considering this report has not made any addition in that case with respect to the loan taken from Emerald Commercial Pvt. Ltd.

18 ITA No. 134 to 139/JODH/2025 ITA No. 306 and 328/JODH/2025 (Assessment Year 2014-15 to 2019-20) 7.4.2 The Ld. AR submitted that Shri Birendra Taparia in his statement recorded u/s 131 dated 01.02.2019, with reference to the loan raised by S.L. Cotton Pvt. Ltd., has accepted that unsecured loans were raised, but how the company came to their contact can be explained only by his brother Shri Dharmendra Maheshwari. He further stated that, he did not know Shri Indrajit Seth and only his brother Shri Dharmendra Maheshwari can explain about the statement of Inderjit Seth. Hence, this statement cannot be said to be an incriminating material found in search. Further, Shri Dharmendra Maheshwari in his statement, accepted that loan was raised and also repaid along with interest. In this statement, no question about Indrajit Seth was asked. Hence, this statement cannot be said to be an incriminating material found in search.

7.4.3 It is noted that Shri Indrejit Seth in his statement in reply to question no. 15, stated that he came into contact with Shri Birendra Kumar Taparia in a social occasion whereas, Shri Birendra Taparia in his statement has stated that, he did not know Indrejit Seth. Further, Shri Indrejet Seth stated that Shri Birendra Kumar Taparia asked him to arrange accommodation entry in form of unsecured loan of Rs.4-5 cr, which he arranged and later the same was refunded by him. It is seen that even this statement was not confronted to Shri Dharmendra Maheshwari. No such question was asked to him with reference to the loan taken by the assessee. In our view, the aforesaid

19 ITA No. 134 to 139/JODH/2025 ITA No. 306 and 328/JODH/2025 (Assessment Year 2014-15 to 2019-20) statement of Indrejit Seth has no evidentiary value where identity, creditworthiness of parties and genuineness of transaction has not been disproved by the department with contradictory material evidence either by direct or indirect reference to any incriminating material and, therefore, such statement of third party, after search cannot be a basis to treat the genuine loan transaction as an accommodation entry.

7.4.4 On similar facts, the ITAT, Jaipur Bench in case of DCIT V. J K International (2019) 184 DTR 334 (JP) has held that statement recorded after search of the assessee is not an incriminating material. The relevant para of this decision is reproduced as under: -

“ The AO on the basis of statement treated the purchases made by the assessee as bogus and proceeded to make the addition of 25 per cent of such purchases as bogus under s. 69C. The AO also taxed such disallowances under s. 115BBE. It is an admitted fact that for the assessment year under consideration as well as for the asst. yr. 2011-12, the assessment stood completed on the date of search as the time period to issue the notice under s. 143(2) had also expired. Therefore, for the year under consideration as well for the asst. yr. 2011- 12, the addition could only be made with regard to incriminating seized material found during the course of search. The CIT(A) has rightly concluded that the addition made by the AO without any reference to the seized material is not legally sustainable. Even otherwise, the AO had made addition by merely relying on the statement of one RJ which cannot be termed as an incriminating material as said statement should have related to incriminating material found during the course of search or statement must be made relatable to material by subsequent enquiry/investigation” 7.4.5 In another case of PCIT (Central) & Ors. Vs. Anand Kumar Jain (HUF) & Ors. (2021) 432 ITR 0384 (Del) (HC) has held that the statement recorded in search is not an incrementing material vide para 8 which reads as under:

20 ITA No. 134 to 139/JODH/2025 ITA No. 306 and 328/JODH/2025 (Assessment Year 2014-15 to 2019-20) “8. Next, we find that, the assessment has been framed under s. 153A, consequent to the search action. The scope and ambit of s. 153A is well defined. This Court, in CIT vs. Kabul Chawla (2015) 281 CTR (Del) 45 : (2015) 126 DTR (Del) 130 : (2016) 380 ITR 573 (Del) : 2015 SCC OnLine Del 11554, concerning the scope of assessment under s. 153A, has laid out and summarized the legal position after taking into account the earlier decisions of this Court as well as the decisions of other High Courts and Tribunals. In the said case, it was held that the existence of incriminating material found during the course of the search is a sine qua non for making additions pursuant to a search and seizure operation. In the event no incriminating material is found during search, no addition could be made in respect of the assessments that had become final. Revenue’s case is hinged on the statement of Mr. Jindal, which according to them is the incriminating material discovered during the search action. This statement certainly has the evidentiary value and relevance as contemplated under the Explanation to s. 132(4) of the Act. However, this statement cannot, on a standalone basis, without reference to any other material discovered during search and seizure operations, empower the AO to frame the block assessment.” 7.4.5. The Hon’ble Supreme Court in case of PCIT Vs. Abhisar Buildwell (P) Ltd. (2023) 225 DTR 105/ 293 Taxman 141 (SC) after considering decisions of various High Courts in favour of the assessee held vide para 11 to 14 that in the absence of any incriminating material found in search no addition can be made in the assessment framed u/s 153A of the Act which are concluded assessment.

7.4.6 In is evident from the record that in the reply to Q. No. 15 & 17, Shri Indrajit Seth has stated that Shri Birendra Kumar Taparia came in his contact in a social occasion however, he has failed to mention which social function. The word ‘social function’ is very wide & vague term. In between the answer he has also referred the word ‘one middleman’ but failed to tell the name of middleman. On the contrary, Shri Birendra Taparia has stated in his statement u/s 132(4) of the Act that he does not know Sh.

21 ITA No. 134 to 139/JODH/2025 ITA No. 306 and 328/JODH/2025 (Assessment Year 2014-15 to 2019-20) Indrajit Seth and never met him. In the present case, the opportunity to cross examine Shri Indrajit Seth was not provided to the assessee, which is against the principle of natural justice. Hon’ble Supreme Court in case of Andaman Timber Industries Vs. CCE 127 DTR 0241 has held that denial of opportunity to the assessee to cross-examine the witnesses whose statements were made the sole basis of the assessment is a serious flaw rendering the order a nullity in as much as it amounted to violation of principles of natural justice.

7.4.5 We find from the audited financial statement of Emrald Commercial Ltd. (APB 143-173) filed in case of SL Cotton Pvt Ltd, that reserve and surplus of this company as on 31.03.2014 was Rs.15,11,68,327/-, and short term loans and advances is Rs.22,69,52,133/- which were in itself establishes the creditworthiness of the company. Furthermore, on the loan received, assessee has paid interest on year-to-year basis after deduction of tax at source (TDS) and the loan was also fully repaid in Financial Year 2016-17 as evident from the account statement of this company in the books of the assessee (APB, Pgs.157-159). Meaning thereby that when loan is repaid, then the transaction cannot be alleged to be sham transaction for which reliance is placed on the decision in the case of Pr. CIT, Udaipur Vs. Shubh Mines Pvt. Ltd. DBITA No.96/15 order

22 ITA No. 134 to 139/JODH/2025 ITA No. 306 and 328/JODH/2025 (Assessment Year 2014-15 to 2019-20) dt. 03.05.2016 (Raj) (HC). The Hon’ble High Court confirmed the order of lower authorities by giving the following findings at para 7 of its order:-

“7. A bare perusal of the assessment order reveals that the AO has made the addition on suspicion which is based on the statements of third party Shri Aseem Kumar Gupta, admittedly, recorded in the back of the assessee. It has come on record that the share application money of Rs.50,00,000/- was received from Moderate Credit Corporation Ltd., a listed company. It is not disputed before this court that the investment made was received by account payee cheque and the same was refunded by an account payee cheque when the company dropped its project. In the considered opinion of this court, in absence of any cogent evidence on record establishing that the money shown to have received as share application money, was as a matter of fact, unaccounted money belonging to the assessee company, the finding arrived at by the AO, which is based on suspicion, has rightly been held not sustainable in the eyes of law. Suffice it to say that the finding arrived at by the CIT (A), affirmed by the ITAT, which remains a finding of fact, cannot be said to be capricious or perverse.” 7.4.6 The department case is hinged on the statement of Mr. Indrajit Seth, which according to them is the incriminating material discovered during the search action. This statement would certainly have the evidentiary value and relevance as contemplated under the Explanation to s. 132(4) of the Act but this statement cannot, on a standalone basis, without reference to any other material discovered during search and seizure operations, empower the AO to make the addition treating genuine transaction as alleging accommodation entry brushing aside the submission of the appellant. In our considered view, in absence of any cogent evidence on record establishing that the money shown to have received as accommodation entry or unexplained loan as a matter of fact, unaccounted money belonging to the assessee

23 ITA No. 134 to 139/JODH/2025 ITA No. 306 and 328/JODH/2025 (Assessment Year 2014-15 to 2019-20) company, the finding arrived at by the AO, based on suspicion, is unwarranted in the eyes of law.

7.4.7 Considering the peculiar facts and judicial precedents on the issue, we hold that the impugned order is infirm and perverse to the facts on record. We, therefore, accept the grievance of the assessee as genuine and as such delete the addition of Rs.23,80,000/- made u/s 68 of the Act and consequential related disallowances of Rs.17,850/- u/s 69C of the Act and interest of Rs.42,957/-.

8.1 We find that in the search, a hand written diary was found and seized, vide Exhibit 7 of Annexure-AS (PB 80-124). Based on this diary, assessee prepared date wise cash inflow/ outflow statement, which is reproduced at pages 23-25 of the assessment order and the nature wise receipt and investment/expenditure are given at page 20 of the assessment order. Based on these details furnished and as reproduced in the

24 ITA No. 134 to 139/JODH/2025 ITA No. 306 and 328/JODH/2025 (Assessment Year 2014-15 to 2019-20) assessment order, the assessee has computed his commodity income of Rs.21,25,000/- and it was offered for tax. However, the AO being not satisfied, had worked out such income at Rs.26,05,000/- and thus, made addition of the Rs.4,80,000/- u/s 68 of the Act.

8.2 It is seen that assessee explained before Ld. CIT(A) that the difference of Rs.4,80,000/- (26,05,000-21,25,000) was on account of three entries as reproduced at page 21-22 of the CIT(A) order. The Ld. CIT(A) accepted the explanation of the assessee w.r.t. the realisation of advance of Rs.2 lacs from Sampat Lahuti on 18.10.2014 and thereby confirmed the balance amount of Rs.2,80,000/-.

8.3 The Ld. AR explained that the two entries for which addition is confirmed by Ld. CIT(A) is entry dt. 21.11.2014 (APB 37), where against the amount of Rs.2,30,000/- the narration is “Ander se” and entry dt. 09.02.2015 (APB 89), where against the amount of Rs.50,000/-, narration is “Ma ka jama”. The entry of “Ma ka jama” is also crossed. However, the Ld. CIT(A) has not accepted the explanation of the assessee w.r.t. entry dt. 21.11.2014 of Rs.2,30,000/- because, assessee has not proved that amount was separately kept in safe out of earlier withdrawals.

8.4 From the date wise cash inflow/ outflow particulars of this diary, as reproduced by the AO at page 22-25 of the assessment order, it is evident that the total cash

25 ITA No. 134 to 139/JODH/2025 ITA No. 306 and 328/JODH/2025 (Assessment Year 2014-15 to 2019-20) balance was Rs.4,11,000/-, but, in the diary the opening balance as on 21.11.2014 is written as Rs. 35,000/- and thereafter, Rs. 2,30,000/- is added with the narration “Ander se”. This amount is less than Rs. 4,11,000/-, which in itself proves that it is not an unexplained income. Similarly, the entry dt. 09.02.2015 of Rs. 50,000/-, with the narration “Ma Ka Jama” is crossed, which in itself proves that amount is not received. The department failed to controvert the factual contention of the assessee.

8.5 It is undisputed fact on record that from cash inflow/ outflow particulars of the diary (Exhibit 7), as reproduced by the AO at page 22-25 of the assessment order, that the total cash balance was Rs. 4,11,000/-, and if the entries in the diary regarding the opening balance as on 21.11.2014 which was written as Rs. 35,000/- and thereafter, Rs.2,30,000/- is added with the narration “Ander se” is considered, then the source of the balance amount of Rs. 2,80,000/-stands explained.

8.6 Accordingly, we hold that the Ld. CIT (A) was not justified in confirming the addition of Rs.2,80,000/- and as such same is deleted. Thus, ground no. 4 is allowed.

ITA No. 136/JODH/2025 (Assessment Year 2016-17) and ITA No. 137/JODH/2025 (Assessment Year 2017-18):

26 ITA No. 134 to 139/JODH/2025 ITA No. 306 and 328/JODH/2025 (Assessment Year 2014-15 to 2019-20) The issue of interest payment on unsecured loan taken from Emrald Commercial Ltd. has been discussed during Assessment Year 2015-16 as above. Considering the similar issue on identical facts, our observation and finding given in in ITA No. 135/JODH/2025 (Assessment Year 2016-17) shall apply to ITA No. 136 and 137/Jodh/2025 (Assessment Year 2016-17 and 2017-18) in mutatis mutandis, ordered accordingly. Thus, we delete the disallowance of interest of Rs.2,61,680/- and Rs.1,74,965/- in Assessment Year 2016-17 and 2017-18. Thus, ground no. 1 of both these appeals is allowed.

In the 2nd ground of the ITA No. 137/JODH/2025, the appellant has challenged 9. that the Ld. CIT(A) has erred on facts and in law in confirming the addition of Rs.2,50,000/- on the basis of Exhibit 7 of Annexure AS by treating the same as commodity income by not accepting the explanation of assessee that the same represent amount received from the cash kept at home and therefore the same is not the commodity income.

9.1 Similar to earlier assessment years, the assessee has prepared date wise cash inflow/ outflow statement, which is reproduced at page 21-22 of the assessment order, based on a hand written diary which was found and seized, vide Exhibit 7 of Annexure-AS, in search (APB 80-124). It is noted that the nature wise receipt and

27 ITA No. 134 to 139/JODH/2025 ITA No. 306 and 328/JODH/2025 (Assessment Year 2014-15 to 2019-20) investment/expenditure are also given at page 18 of the assessment order showing that assesse has computed the commodity income of Rs.4,70,000/-, which is offered for tax. However, the AO was not satisfied and worked out such income at Rs.40,15,000/- and made addition of the same u/s 68 of the Act.

9.2 In appeal, the Ld. CIT(A) accepted the explanation of the assessee and granted part relief to the assessee.

9.3 The Ld. AR submitted that the three entries constituting Rs.2,50,000/-, the addition confirmed by Ld. CIT(A) was the entries dated 04.09.2016 of Rs.1 lac (APB, Pg. 99), entry dated 02.03.2017 of Rs.1 lac (APB, Pg. 100) and again entry dated 02.03.2017 of Rs.50,000/- (APB, Pg. 100), against which the narration is written was “Ander se nikala”.

9.4 The Ld. CIT(A) has not accepted the explanation of the assessee stating that assessee has not proved that amount was separately kept in safe out of earlier withdrawals. It is seen that the noting in this diary for the year under consideration (APB, Pgs. 98-103) are the noting where in the diary against each noting the amount mentioned on above 3 dates, the narration was written as “Andar se nikala” which in itself mean that it is the amount withdrawn from the safe. Moreover, the assessee

28 ITA No. 134 to 139/JODH/2025 ITA No. 306 and 328/JODH/2025 (Assessment Year 2014-15 to 2019-20) has himself offered Rs.4,70,000/- as commodity income, which is more than this amount. Meaning thereby that source of the alleged unexplained money of Rs.2,50,000/- confirmed by Ld. CIT(A) stands explained and accordingly, this addition of Rs.2,50,000/- is deleted.

9.5 As regards to the addition of Rs.3,000/- confirmed by Ld. CIT(A) based on noting on page 16 of the seized annexure (PB 97) dt. 01.04.2016, it was explained that the noting on this paper is that of Rs.10,000/- advanced to Gurani and from 01.04.2016 he would pay Rs.3,000/- and there was a cross mark. Thus, Rs.10,000/- added by the AO (refer page 23 of the assessment order) and that Rs.3,000/- was wrongly taken by AO at Rs.30,000/- but, reduced by Ld. CIT(A) to Rs.3,000/- which indicate repayment of loan cannot be added.

9.6 In view of that matter, we are of the view that the addition confirmed by Ld. CIT(A) on account of repayment of loan is not sustainable and as such the addition of Rs. 3000/- is deleted. Thus, Ground No. 2 is allowed.

ITA No.138/JODH/2025 (Assessee) and ITA No.306/JODH/2025 (Department) AY 2018-19:

29 ITA No. 134 to 139/JODH/2025 ITA No. 306 and 328/JODH/2025 (Assessment Year 2014-15 to 2019-20) 10. The ground No. 1 of the assesee and ground No. 3 of the department pertains to the alleged unexplained investment in purchase of land where the assesse has challenged the addition of Rs.2.58 crores confirmed by the Ld. CIT (A) and allowing alternate plea of set off in restricting the addition to Rs.46,50,135/- and the department has objected in restricting the addition to Rs.46,50,135/- as against Rs.2.58 crores on account of alleged unexplained investment in purchase of land.

10.1 In the course of search proceedings at the residence of the assessee, backup image from the mobile phone of Shri Dharmendra Maheshwari were obtained. From the image on a plain paper (APB, Pg. 168), it transpires that an agreement is made between Shri Ram Niwas Mittal and assessee on 20.11.2016 regarding purchase of two constructed plots having area 4000 sq. mtr. @Rs.7,500/- per sq. mtr. i.e. Rs.3,00,00,000/- investment. In response to query raised by AO (Assessment Order page 22-23), assessee filed the reply, reproduced at page 24 of the order. The AO however ignored the reply and concluded that assessee in the statement has accepted that out of the total sale amount of Rs.3 crores only Rs.42 lacs were paid by cheque as per the sale deed dt.30.08.2017 and accordingly, the addition of Rs.2,58,00,000/- was made u/s 69 of the Act.

30 ITA No. 134 to 139/JODH/2025 ITA No. 306 and 328/JODH/2025 (Assessment Year 2014-15 to 2019-20) 10.2 The Ld. AR submitted that the assessee made a detailed submission before Ld. CIT(A) and alternatively pleaded that if the contention of the assessee is not accepted then set off of the income offered in the earlier years and the funds available as per the cash inflow/ outflow statement be allowed against the addition made by the AO. The Ld. CIT(A) vide para 6.4, page 19-24 partly confirmed the addition made by the AO but, accepted the alternate plea of allowing set off but since even after such set off, there remain a deficit of Rs.46,50,135/-. Thus, the Ld. CIT(A) has confirmed the addition of Rs. 46,50,135/- and balance addition of Rs.2,11,49,865/- was deleted.

10.3 The AO alleged that the assessee has purchased the property for Rs.3,00,00,000/- as per agreement, backup image of mobile phone of son of appellant. The issue disputed before us is to decide whether the assessee has made the payment of ‘on money’ of Rs.2,58,00,000/- prior to the date of search or not. It is evident from the backup image extracted from the mobile phone of Shri Dharmendra Maheshwari son of the applicant (APB, Pg. 168), that assessee entered into an agreement with Shri Ramniwas Mittal on 20.11.2016 for purchase of plot no 19-20 situated at Basni RIICO Industrial Area Nagaur. As per the agreement, applicant agreed to purchase 4000 sq. mtr. of land @7500 per sqm. i.e. for Rs. 3,00,00,000/-. As per payment terms, Rs.5,00,000/- was paid as token money on the same day i.e.

31 ITA No. 134 to 139/JODH/2025 ITA No. 306 and 328/JODH/2025 (Assessment Year 2014-15 to 2019-20) on 20.11.2016 and balance amount was to be paid by 20.11.2017 otherwise interest was to be chargeable on the same. Sale deed was executed on 30.08.2017 by making payment of Rs.42 lacs through account payee cheque. The balance payment of Rs.253 lacs was not made. The party was insisting for entire payment at one go, but since, assessee could not arrange the same, it was not paid. In the meanwhile, search took place, wherein the entire cash which was to be paid was found and seized. Thus, till date of search no such amount was paid. Even in search no document was found which proves that the assessee has made the payment of the same in the year under consideration. Hence, the addition made by the AO and confirmed by Ld. CIT(A) is unjustified and the same be deleted.

10.3.1 Without prejudice, in case the contention of the assessee is not accepted, then also the source of such payment is the commodity income offered by the assessee for tax. In support of the same, the assessee has filed the cash flow statement. Besides, if the addition made by the AO in respect of unsecured loans of Rs.3,20,00,000/- and interest thereon in the case of Subh Laxmi Cotton Private Limited is confirmed than the repayment of such loan shown in the books is available with the assessee for making reinvestment in various assets of the assessee as he was

32 ITA No. 134 to 139/JODH/2025 ITA No. 306 and 328/JODH/2025 (Assessment Year 2014-15 to 2019-20) the promoter director of the company who has utilized the same. After considering the same, the availability of the cash with the assessee works out as under:-

Particulars Amount (Rs.) AY AY AY AY AY 2014-15 2015-16 2016-17 2017-18 2018-19 Opening Balance - 10617000 10409640 27420140 55483290 Inflow Opening Balance as on 09-09-2013 1150000 - - - - (Addition made by the AO) Commodity Income (as per diary) [This is offered by the assessee in assessment 9236250 2125000 1600000 470000 1070000 proceeding and also added by the AO] Realisation of Advances out of the advance given through Sampat Lahoty (as 500000 200000 475000 306000 373000 per diary) Interest income on advance given to Mr. 154000 180000 26000 Mani (Addition made by the AO ) Inflow from received back of loan given to Mani (Addition has been made at the 1500000 time of giving advance and considered in outflow statement) Receipt from Soap Factory (This income is offered in case of Birendra Taparia in his assessment proceeding on account of business income earned and handed 5590000 5150000 3250000 over to Bhagwan Taparia, also added by the AO and finally confirmed in appeal by the CIT appeal) Inflow of cash from repayment of the loan to Emerald Commercial Limited (This has been treated as 2842105 - accommodation entry by the AO and confirmed in appeal) Inflow from repayment in respect of loan and interest added by AO in case of SL 4000000 2535840 12535000 20850445 Cotton Private Limited Total 14886350 15477840 30763640 57218690 61702290 Outflow Land purchased from Nagour Agrotech 25800000 Donation (as per diary) 26,000 246000 23,000 106000

33 ITA No. 134 to 139/JODH/2025 ITA No. 306 and 328/JODH/2025 (Assessment Year 2014-15 to 2019-20) House Hold Expenses (as per diary) 1524350 2422000 1816500 1735400 852840 Advances Given through Sampat Lahoty 2475000 (as per diary) Jewellery Purchased (as per diary) 244000 20,000 4000 200000 Advance given to Mani (for which 1500000 addition has been made by the AO) Amount used in Accommodation Entry of loan from Emerald Commercial Private 2380000 Limited Total Payment 4269350 5068000 3343500 1735400 26958840 Closing Balance 10617000 10409840 27420140 55483290 34743450

From the above, the source of the alleged cash payment of Rs.2,58,00,000/- is otherwise established and Accordingly the AR pleaded that the addition confirmed by Ld. CIT(A) to the extent of Rs.46,50,135/- be deleted.

10.4 The Ld. DR on the other hand placed reliance on the assessment order to support the department ground of appeal and contended that the Ld. CIT(A) has not been justified in considering the undisclosed investment of income of Rs.2,58,00,000/- while restricting the same to Rs.46,50,135/- and this finding are not acceptable for the reason that the ld. CIT(A) has ignoring the facts enumerated by the AO and material available on record. However, the Ld. DR did not mention or point out any factual material evidence on record which has not been considered or ignored by the Ld. CIT (A).

34 ITA No. 134 to 139/JODH/2025 ITA No. 306 and 328/JODH/2025 (Assessment Year 2014-15 to 2019-20) 10.5 It is evident from the record that the backup image extracted from the mobile phone of Shri Dharmendra Maheshwari (APB, Pg. 168), that assessee entered into an agreement with Shri Ramniwas Mittal on 20.11.2016 for purchase of plot no 19-20 situated at Basni RIICO Industrial Area Nagaur. As per the agreement, applicant agreed to purchase 4000 sq. mtr. of land @7500 per sqm. i.e. for Rs. 3,00,00,000/-. As per payment terms, Rs.5,00,000/- was paid as token money on the same day i.e. on 20.11.2016 and balance amount was to be paid by 20.11.2017 otherwise interest was to be chargeable on the same. Sale deed was executed on 30.08.2017 by making payment of Rs.42 lacs through account payee cheque. The balance payment of Rs.253 lacs was not made. The party was insisting for entire payment at one go, but since, assessee could not arrange the same, it was not paid. In the meanwhile, search took place, wherein the entire cash which was to be paid was found and seized. It is noted that till date of search no such amount was paid and that even in the search proceedings or post search or assessment proceedings no document was found or recovered which could prove that the assessee has made the payment of Rs.253 lacs in the year under consideration. Further, the AO or the CIT (A) failed to bring on record any corroborative evidence on record as regard to payment of any such on- money by the appellant for the aforesaid investment in the plots.

35 ITA No. 134 to 139/JODH/2025 ITA No. 306 and 328/JODH/2025 (Assessment Year 2014-15 to 2019-20) 10.6 In view of that matter, we hold that the Ld. CIT (A) was not justified in confirming the addition and granting relief to the appellant by allowing alternative plea of set off when there was no iota of evidence brought on record regarding the alleged on money payment for the purchase of the alleged property and that there was sufficient fund available with the appellant as per the above cash inflow and outflow statement of the assessee.

10.7 Accordingly, the addition confirmed by Ld. CIT(A) to the extent of Rs.46,50,135/- is deleted. Thus, the ground no. 1 of the assesse is allowed and ground no.3 of the department is rejected.

11.1 In the search, at the residence of the assessee, a hand written diary was found and seized vide Exhibit-7 of Annexure-AS. The assessee based on this diary prepared cash inflow and outflow statement and computed the commodity income of Rs.10,70,000/- which was offered for tax during assessment proceeding. The AO after

36 ITA No. 134 to 139/JODH/2025 ITA No. 306 and 328/JODH/2025 (Assessment Year 2014-15 to 2019-20) reproducing the summary of the diary at page 4-6 of the assessment order and reproducing the explanation of the assessee at page 7-13 of the order held that assessee has not considered all the incoming transactions in the diary and worked out the total incoming amount as per diary at Rs.16,12,500/- as per table given at page 13 and 14 of the assessment order. Accordingly, the AO held that since, assessee has offered only Rs.10,70,000/- during the assessment proceedings without including the same in the return of income, AO made addition of Rs.16,12,500/- u/s 68 of the Act.

11.2 The Ld. CIT(A) vide para 4.4 and 4.5, held that out of the addition of Rs.16,12,500/- made by the AO, assessee has accepted the commodity income to the extent of Rs.10,70,000/-. The Ld. CIT (A) stated that the balance difference of Rs.5,42,500/- comprises of Rs.3,73,500/- represent receipt of the repayment of loan given through Sampat Lahuty, Rs.1,22,000/- is rough joting and Rs.47,000/- represent the expenses and not income and Accordingly, the addition of Rs.5,42,500/- was deleted by appreciating the following explanation of the assessee in respect of noting in the diary:-

Incoming Page no. Date Narration Finding of Ld. CIT(A) amount Realisation of the advance given through Sampat Lahoty

37 ITA No. 134 to 139/JODH/2025 ITA No. 306 and 328/JODH/2025 (Assessment Year 2014-15 to 2019-20) In AY 2014-15, assessee has 21(back side) Nokha Gattani considered advance of 08-04-2017 3,06,000 (PB 103) se aaya Rs.24,75,000/- given as outflow of funds. In that year also Laxmi Rathi ka assessee has realised Rs.5 26 (PB 107) 15-12-2017 5,000/- jama lakhs, which has been accepted by the AO. Once the source of Devkishan ka advance given is sourced out of 26 (PB 107) 15-12-2017 50,000/- jama the income declared unaccepted by the AO as per the cash flow statement, its realisation cannot be taxed, 26(back side) 19-10-2017 Ritesh Aaya 12,500/- and therefore, the addition of (PB 108) Rs.3,73,500/- is rightly deleted by Ld. CIT(A). Other Entries The noting of Rs.1,22,000/- (80,000+42,000) nowhere suggests that this represents (80,000+ the income, no date or name is 26(back side) 42,000) 24-02-2018 1,22,000 mentioned. Whether it is (PB 108) Incoming received or paid is not amount mentioned. Thus, it is a rough noting and therefore, the addition made is unjustified. 24(back side) These amounts represent the (PB 106) expenses and not the income. Assessee has considered the 23-11-2017 Ramesh Liya 10,000/- same in the cash outflow under the heading household expenses and hence, the addition is deleted.

11.3 Considering the facts and cash inflow- out flow statement as tabulated here above, we hold that the Ld. CIT(A) has rightly deleted the addition of Rs.5,42,500/- made by the AO, by appreciating the facts of the commodity income of Rs.10,70,000/- accepted by the assessee in the cash flow statement. We, therefore,

38 ITA No. 134 to 139/JODH/2025 ITA No. 306 and 328/JODH/2025 (Assessment Year 2014-15 to 2019-20) see no reason to interfere in the decision of Ld. CIT(A) on this issue. Thus, ground no. 1 of the department is rejected.

12.1 The AO observed that assessee has given the cash loan of Rs.15,00,000/- to Mr. Mani @12% interest from 23.05.2015 to 22.05.2016 which was further extended to 22.05.2017 as per Exhibit 14 of Annexure-AS. Accordingly, he computed the interest income for the year under consideration at Rs.1,80,000/- and made addition for the same.

12.2 The Ld. CIT(A) vide para 5.5, at page 9, held that advance has been received back on 22.05.2017 and therefore, interest is leviable only for 52 days. The correct interest for 52 days is Rs.26,000/- and therefore, the balance addition of Rs.1,54,000/- was deleted.

12.3 We find from the record as also stated by the AO, that assessee advanced Rs.15,00,000 to Mr. Mani @12% interest from 23.05.2015 to 22.05.2017. The period

39 ITA No. 134 to 139/JODH/2025 ITA No. 306 and 328/JODH/2025 (Assessment Year 2014-15 to 2019-20) covered in the year under consideration is 52 days only and the AO has wrongly considered the interest for the entire year. The interest of 52 days works out to Rs.26,000/-. We, therefore, hold that the Ld. CIT(A) has correctly restricted the addition on account of interest income to Rs.26,000/-. Accordingly, the order of Ld. CIT(A) on this issue in restricting addition to Rs. 26,000/- on account of interest is upheld. Thus, the ground no. 2 of the department is dismissed.

ITA No.139/JODH/2025 (Assessee) and ITA No.328/JODH/2025 (Department) AY 2019-20:

13.1 Briefly the facts as per record are that a search u/s 132 was conducted on 30.01.2019, where cash of Rs.2,00,92,690/- was found in the assessee’s bedroom wall, out of which Rs.2,00,00,000/- was seized and that cash of Rs.35,00,000/- was found and seized from the premises of Bhawani Singh. In the statement u/s 132(4), assessee admitted that the source of cash is out of unaccounted income earned from

40 ITA No. 134 to 139/JODH/2025 ITA No. 306 and 328/JODH/2025 (Assessment Year 2014-15 to 2019-20) soap factory, interest and commodity income. However, the AO did not allow the set

off of against the addition made on account of unaccounted income, considering the

entire cash of Rs.2,35,00,000/- as unexplained money u/s 69A of the Act.

13.2 In appeal, the Ld. CIT(A) vide para 4.3, page 6-9 of the order, after allowing the

set off, confirmed the addition to the extent of Rs.1,03,74,195/-.

13.3 The Ld. AR submitted that the source of the cash found in search was

commodity income, interest income and income from soap factory. The appellant has

submitted an updated cash flow statement, after considering the additions made by

AO as under: -

Particulars Amount AY AY AY AY AY AY 2014-15 2015-16 2016-17 2017-18 2018-19 2019-20 Opening Balance - 10617000 10409840 27420340 55483490 34743650 Inflow Opening Balance as on 09-09- 2013 1150000 - - - - (Addition made by the AO) Commodity Income (as per diary) [This is offered by the assessee 9236250 2125000 1600000 470000 1070000 2310000 in assessment proceeding and also added by the AO] Commodity Income (as per Ex-1, 9087410 Ex-2 & Ex-3) Realisation of Advances out of the advance given through Sampat 500000 200000 475000 306000 373000 306000 Lahoty (as per diary) Interest income on advance given to Mr. Mani (Addition made by 154000 180000 26000 the AO)

41 ITA No. 134 to 139/JODH/2025 ITA No. 306 and 328/JODH/2025 (Assessment Year 2014-15 to 2019-20) Inflow from received back of loan given to Mani (Addition has been made at the time of giving 1500000 advance and considered in outflow statement) Receipt from Soap Factory (This income is offered in case of Birendra Taparia his assessment proceeding on account of business income 5590000 5150000 3250000 1700000 earned and handed over to Bhagwan Taparia, also added by the AO and finally confirmed in appeal by the CIT appeal) Inflow of cash from repayment of the loan to Emerald Commercial Limited (This has been treated 2842105 - as accommodation entry by the AO and confirmed in appeal) Inflow from repayment in respect of loan and interest added by AO 4000000 2535840 12535000 20850445 in case of SL Cotton Private Limited Total 14886350 15477840 30763640 57218890 61702490 48147060 Outflow Land purchased from Nagour 25800000 Agrotech Donation (as per diary) 26,000 246000 23,000 106000 Household Expenses (as per 1524350 2422000 1816500 1735400 852840 1764250 diary) Advances Given through Sampat 2475000 Lahoty (as per diary) Jewellery Purchased (as per diary) 244000 20,000 4000 200000 300000 Advance given to Mani (for 1500000 which addition has been made by the AO) Amount used in Accommodation Entry of loan from Emerald 2380000 Commercial Private Limited Cash found from the residence of 20092690 Bhagwan Taparia Cash found from the residence of 3500000 Bhawani Singh Total Payment 4269350 5068000 3343500 1735400 26958840 25656940 Closing Balance 10617000 10409840 27420340 55483490 34743650 22490120

42 ITA No. 134 to 139/JODH/2025 ITA No. 306 and 328/JODH/2025 (Assessment Year 2014-15 to 2019-20) From the above, the source of cash is fully explained and therefore, the addition confirmed by Ld. CIT(A) to the extent of Rs. 1,03,74,195/-.be deleted.

13.4 The Ld. DR submitted that the Id. CIT(A) was not justified in restricting the addition of Rs.2,35,00,000/- to Rs.1,03,74,195/- without appreciating the fact that during the assessment proceedings there was no correlation as sought from the assessee with other disclosure or detection of undisclosed income of other premises and concerns of which the assessee is not proprietor/director. However, he did not rebut the source of cash as explained out of commodity income, interest income and income from soap factory as established from the updated cash flow statement as above.

13.5 We find that cash Rs.2,00,00,000/- and Rs.35,00,000/- was seized during the search conducted u/s 132 on 30.01.2019. In the statement u/s 132(4), assessee admitted that the source of cash was out of unaccounted income earned from soap factory, interest and commodity income. It is noted that the AO did not allow the set off against the unaccounted income while treating the entire cash of Rs.2,35,00,000/- as unexplained money u/s 69A of the Act by merely stating that there was no correlation as sought from the assessee with other disclosure or detection of undisclosed income of other premises and concerns of the assessee without

43 ITA No. 134 to 139/JODH/2025 ITA No. 306 and 328/JODH/2025 (Assessment Year 2014-15 to 2019-20) rebutting the submission and factual details furnished by the assessee. The Ld. CIT (A) has allowed the set off, however he has confirmed the addition to the extent of Rs.1,03,74,195/- without rebutting the source of cash as explained out of commodity income, interest income and income from soap factory as established from the updated cash flow statement as above. The Ld. AO, the CIT (DR) did not controvert the factual details of the cash inflow and outflow and the available cash balance of Rs. 2,24,90,120/- from the details tabulated as above. In our view, the Ld. CIT (A) decision in confirming the addition to the extent of Rs.1,03,74,195/- is not justified to the facts on record.

13.6 From the record, it is evident that the appellant had various sources of income as to support the computation of cash balance available of Rs. 2,24,90,120/- as per cash flow statement. On allowing the credit of the available cash to the appellant, the balance cash remain in Rs. 10,09,880/- (Rs. 2,35,00,000- 2,24,90,120/-). Accordingly, we restrict the addition made by the AO to Rs. 10,09,880/- as against Rs. 1,03,74,195/- confirmed by Ld. CIT(A) out of Rs. 2,35,00,000/- made by the AO u/s 69A of the Act. Thus, ground no. 1 of the department is rejected and that of the assesse ground is partly allowed by confirming the addition to the extent of Rs. 10,09,880/- u/s 69A of the Act.

44 ITA No. 134 to 139/JODH/2025 ITA No. 306 and 328/JODH/2025 (Assessment Year 2014-15 to 2019-20) 14. In ground no. 2 assessee objected to CIT (A)’s confirmation of the addition of Rs.14,83,216/- by treating 390.32 gms of gold jewellery as unexplained and that the Department has questioned the justification in restricting the addition of gold jewellery from Rs.23,48,857/- to Rs.14,83,293/- and deleting addition on account of silver bullion and utensils worth of Rs.6,63,867 without appreciating the fact.

14.1 Admittedly, gold jewellery weighing 3768.100 gms valued at Rs.1,43,19,249/- and silver ornaments/utensils of 12.634 Kg. valued at Rs.6,63,867/- were found and out of the gold jewellery valued at Rs.39,56,627/- was seized at the residence of the assessee. The assessee vide letter dated 01.02.2019 explained that jewellery to the extent of 3150 gms was a reasonable quantity to be possessed in the hands of family members as per CBDT Instruction no. 1916 and the judgment delivered by Hon’ble Rajasthan High Court in case of CIT Vs. Satya NarainPatni. Thereafter the difference of 618.100 gms of gold jewellery was explained in the hands of the assessee’s mother who was 90 years of age and looking to the long years of her marriage a higher quantity of gold ornaments may be considered in her hand. Further, as per Annexure AS-7, assessee has purchased jewellery measuring 227.8 gms valued at Rs.5,68,000/- which is duly considered in the cash flow statement. Similarly, in respect of silver jewellery/ utensils, it was explained to be reasonable possession being received at

45 ITA No. 134 to 139/JODH/2025 ITA No. 306 and 328/JODH/2025 (Assessment Year 2014-15 to 2019-20) the time of marriages and other social occasions. The AO, however, not satisfied and made addition for gold jewellery weighing 618.100 gms valued at Rs.23,48,857/- and for silver jewellery/ utensils weighing 12.634 kgs valued at Rs.6,63,867/- as unaccounted income u/s 69A of the Act.

14.2 The Ld. CIT(A) vide para 5.4, page 13 of the order allowed credit of jewellery purchased from time to time considered into cash flow statement at 227.78 gms and confirmed the addition for balance gold jewellery of 390.32 gms valued at Rs.14,83,216/-. Further, by referring to the decision of ITAT, Jaipur Bench, the silver found was considered as reasonable.

14.3 The Ld. AR has explained that 390.32 gms gold jewellery out of gold jewellery measuring 618.100 gms was treated as excess after considering the jewellery to the extent of 227.78 gms were being purchased in Assessment Year 2014-15 to 2019-20 and was considered in the cash flow statement. Hence, the addition to this extent is rightly deleted by Ld. CIT(A). The AR submitted that the balance gold jewellery measuring 390.32 gms is related to assessee’s mother who was 90 years of age and looking to the years of her marriage and the status of the family, a higher quantity of gold ornaments should be considered in her hand. In support, the AR has placed reliance on various case law filed on record.

46 ITA No. 134 to 139/JODH/2025 ITA No. 306 and 328/JODH/2025 (Assessment Year 2014-15 to 2019-20) 14.4 The Ld. CIT (DR) placed reliance on the assessment order, He argued that the CIT(A) was not justified in restricting the addition of Rs.23,48,857/- to Rs.14,83,293/- without appreciating the fact that the assessee did not offer any plausible explanation including any documentary evidence in support of his contention that he held as much as excess gold jewellery value of Rs.23,48,867/- may be in reasonable possession of the family.

14.5 It is seen that the Ld. CIT(A) has discussed in para 5.4 on page 13 of the impugned order while allowing the credit of jewellery purchased to the extent of 227.78 gms from time to time, after taking into consideration, the cash flow statement. While confirming the addition for balance gold jewellery of 390.32 gms valued at Rs.14,83,216/- , the Ld. AO or the CIT (A) has not rebutted the contention of the appellant that this jewellery was related to assessee’s mother who was 90 years of age and that the authorities below have not considered the vital fact long marriage life of 90 years old mother and the status of the family, a little higher quantity of gold ornaments could be considered in her hand. Similarly, in respect of silver jewellery/ utensils, we find it to be reasonable possession being received at the time of marriages and other social occasions.

47 ITA No. 134 to 139/JODH/2025 ITA No. 306 and 328/JODH/2025 (Assessment Year 2014-15 to 2019-20) 14.6 In the case of Gyanendra Singh Shekhawat, Jaipur vs ACIT order dated 27 July, 2022 (ITAT) (JAIPUR), it was held as under:–

2.2 We have heard the Counsel of both the parties and we have also perused the materials placed on record i.e. impugned orders as well as judgements relied upon by both the parties. From the records, we noticed that the assessee is an individual and is an Architect by profession. A Search action u/s 132 of the Act was conducted on 02-08-2007 and the assessee was treated as a Member of Kiran Fine Jewellers Group whereas the assessee from the very beginning had taken a definite/ firm stand that except professional relation the assessee had no other business connections with the said Group. However, the addition of Rs.24,03,035/- was made on account of jewellery found during the course of search by treating the same as unexplained investment. The ld. CIT(A) while partly allowing the appeal of the assessee restricted the addition to Rs.17,55,262/-. As per submission of the ld. AR, the assessee belongs to Rajput Community of Rajasthan and as per customs of the Community, some of the Gold/Silver Jewellery/articles are passed on to the subsequent generations and some of the jewellery was received on various festivals/ auspicious occasions and ceremonies. In fact, the assessee had furnished photographs of functions and marriages to show that ladies of his family wearing heavy gold jewellery which according to him is a part of STREEDHAN and deserves to be treated as explained. The ld. AR of the assessee has also drawn our attention to the cash withdrawn by him from his bank account for purchasing some jewellery from time to time in past many years out of his own savings. Therefore, according to the ld. AR of the assesee, the acquisition of jewellery is not excessive looking to the social status of the assessee. 2.4 At this stage, we appreciate CBDT Circular regarding seizure of jewellery during search wherein it has been specifically mentioned at clause (iii) of Circular as under:- "(iii) The authorized officer may having regard to the status of the family and the customs and practices of the community to which the family belongs and other circumstances of the case, decide to exclude a larger quantity of jewellery and ornaments from seizure. This should be reported to the Director of Income tax/Commissioner authorizing the search all the time of furnishing the search report" 2.5 In our view the intention of law is to stick to the jewellery limits mentioned in the Circular. There was no point in inserting the provision at clause (iii) which grants discretionary power to the Income Tax Authorities to decide as to what can be reasonable quantity of jewellery held by

48 ITA No. 134 to 139/JODH/2025 ITA No. 306 and 328/JODH/2025 (Assessment Year 2014-15 to 2019-20) an assessee in view of community practices and social status. To this effect, we draw strength from the decisions of Hon'ble High Court as well as ITAT Benches which are mentioned as under:- (i) Hon'ble Delhi High Court in the case of Ashok Chaddha vs Income Tax Officer in ITA No. 274/2011 has treated the source of jewellery in excess of quantity provided in CBDT instruction by observing as under: ''3. Learned Counsel for the respondent on the other hand relied upon the reasoning given by the authorities below. After considering the aforesaid submissions we are of the view that addition made is totally arbitrary and is not founded on any cogent basis or evidence. We have to keep in mind that the assessee was married for more than 25-30 years. The jewellery in question is not very substantial. The learned counsel for the appellant assessee is correct in her submission that it is a normal custom for woman to receive jewellery in the form of "streedhan" or on other occasions such as birth of at child etc. Collecting Jewellery of 906.900 grams by a woman in a married life of 25-30 wars is not abnormal. Furthermore, there was no valid and/or proper yardstick adopted by the Assessing Officer to treat only 400 grams as "reasonable allowance" and treat the other as "unexplained" Matter would have been different if the quantum and value of the jewellery found was substantial 4. We are, therefore, of the opinion that the findings of the Tribunal are totally perverse and far from the realities of life. In the peculiar facts of this case we answer the question in favour of the assessee and against the revenue thereby deleting the aforesaid addition of 3,87,364/-'' (ii) ITAT Delhi Bench in the case of Suncela Soni Vs DCIT (ITAT Delhi) in ''6.1 After perusing the aforesaid decision of the Hon'ble Delhi High Court, I am of the considered view that facts and circumstances of the present ITA NO.49/JP/2022 SHRI GYANENDRA SINGH SHEKHAWAT VS ACIT, CENTRAL CIRCLE-2, JAIPUR case are similar to the aforesaid decision of the Hon'ble Delhi High Court and hence, the issue in dispute is squarely covered by the aforesaid decision. 6.2 Keeping in view of the aforesaid facts and circumstances of the case as well as the status of the family and on the anvil of the judgement of the High Court of Delhi in the case of Ashok Chadha vs. ITO reported in 14 taxmann.com 57 (Delhi)/202 Taxmann 395 the explanation given by the assessee's counsel is accepted Accordingly the orders of the authorities below are cancelled and addition made by the 10 and confirmed by the Ld. CIT(A) amounting to Rs. 10,65,312/- on account of purported unexplained jewellery claimed by the assessee is deleted"

49 ITA No. 134 to 139/JODH/2025 ITA No. 306 and 328/JODH/2025 (Assessment Year 2014-15 to 2019-20) 14.7 ITAT Delhi Bench in case of Radha Mital and Ruchie Mital Vs. DCIT on limits prescribed by the CBDT circular observed that jewellery belongs to the assessees having received as "streedhan" on the occasion of marriage and also received subsequently on occasions like birth of child etc in pursuant to customs/tradition of family. In ITA NO.49/JP/2022 SHRI GYANENDRA SINGH SHEKHAWAT VS ACIT, CENTRAL CIRCLE-2, JAIPUR, observed that the assessee belongs to “Baniya Family” family have been married for 35 years and 8 years. Further they were jointly residing with their mother-in-law Shanti Mittal who had been married for about 65 years. Apart from the above the family comprised of husband of both the assessee and son. Thus, looking to the tradition of family, Tribunal has accepted the Jewellery in excess of limit prescribed by the above circular, held the excess jewellery explained in view of the fact that the same being received as Streedhan during the course of Marriage and subsequent to marriage.

14.8 Considering the peculiar facts of the case and judicial precedents, the assessee’s mother living with 90 years of age, we hold that the authorities below ought to have considered the vital fact of her long marriage life, customs/family tradition, stridhan and the status of the family of the appellant while considering the reasonableness of the family jewellery seized during the search.

50 ITA No. 134 to 139/JODH/2025 ITA No. 306 and 328/JODH/2025 (Assessment Year 2014-15 to 2019-20) 14.9 Accordingly, the orders of the authorities below on the issue of unexplained jewellery are cancelled and addition confirmed by the Ld. CIT(A) amounting to Rs.14,83,216/- on account of purported unexplained jewellery claimed by the assessee is deleted. Thus, ground no. 2 of the assessee is allowed and that ground no. 2 and 3 of the department are rejected.

15.1 From the residence of Shri Bhawani Singh, some hand written loose papers/slips were found and seized vide Exhibit 1 to 6 of Annexure AS and consequently, the assessee had admitted that cash amounts of Rs.95,42,990/- mentioned on page no. 16, 17 & 18 of Exhibit-1 was his unaccounted income earned from commodity transactions (refer AO page 13-16). During course of assessment proceedings, it was explained that unrecorded commodity income is only Rs.90,87,410/- and difference amount of Rs.4,55,580/- is verifiable from the books of

51 ITA No. 134 to 139/JODH/2025 ITA No. 306 and 328/JODH/2025 (Assessment Year 2014-15 to 2019-20) accounts. The AO observed that only Rs.2,85,030/- out of Rs.4,55,580/- is verifiable from the copy of invoices on account of cash sale of cotton cake. The AO further observed that the assessee has not brought any evidence of commodity income in the form of contract note, platform where these transactions were carried out and the details of the broker to prove that these are income from commodity transactions. Accordingly, AO made an addition of Rs.92,57,960/- as unaccounted income u/s 68 of the Act.

15.2 The Ld. CIT(A) vide para 6.5, page 16 of the order held that income of Rs.90,87,410/- is commodity income offered for tax by assessee during the assessment proceedings and thus, the same is confirmed. However, in respect of balance amount of Rs.1,70,550/-, he applied G.P. rate of 8% to confirm addition of Rs.13,664/-.

15.3 The Ld. AR submitted that the amount of Rs.4,55,580/- comprises of the amount of Rs.60,980/- noted on slip no. 16 scanned by AO at page 14, Rs.36,000/- noted on slip no. 17 scanned by AO at page 15 and Rs.81,410/-, Rs.2 lacs (26,500+1,48,750+24,750), Rs.1,20,800/- and Rs.73,800/- noted on slip no. 18 scanned by AO at page 16. Out of it, AO accepted Rs.60,980/- as recorded sales and

52 ITA No. 134 to 139/JODH/2025 ITA No. 306 and 328/JODH/2025 (Assessment Year 2014-15 to 2019-20) from the balance amount of Rs.3,94,600/-, he accepted the recorded sale of Rs.2,24,050/- and thus, confirmed addition of Rs.1,70,550/-.

15.3.1 The Ld. AR explained that at page 19 of the order, AO has not accepted the sale to the extent of Rs.1,44,300/- only for the reason that link of Buda Ram and Gopal Dugatau is not made to the cash sale made to Shri Pal and Govardhan Das Gupta. The AR submitted that it so happens in the business that goods are sold through broker and the bill is raised in the name of the person stated by the broker. The amount is received from the broker.

15.3.2 In our view, the expectation of the lower authorities for linking of the name mentioned in the slip with the cash memo is not justified because the nature of noting in the slip for which addition is made by the AO is same as the noting in the slip, where addition is not made Ld. CIT(A). Thus, the two revenue authorities itself have made contradictory observation on the noting of the slips. We therefore hold that the differential amount as computed by the AO Rs.1,70,550/- are not sales recorded in books.

15.3.3 Accordingly, the G.P. addition of Rs.13,644/-, confirmed by Ld. CIT(A) is unjustified and as such the same is deleted.

53 ITA No. 134 to 139/JODH/2025 ITA No. 306 and 328/JODH/2025 (Assessment Year 2014-15 to 2019-20) 15.4 As regards to the department objection is concerned, we find that all the transactions for which addition is made by the AO represent the commodity transaction as accepted by the department in its ground itself. In our view, when these transactions are out of books, the expectation of the department to furnish contract note or to give details of the broker or the platform at which these transactions were carried out is an unreasonable quarry, once the assessee in his statement itself has mentioned that it represents the income from commodity transaction. The CIT (DR) for the department failed to state that AO did bring any new material on record that such receipt is not from commodity transaction except reiterating the observation of the AO that during the assessment proceedings it is revealed that the assessee is indulged in commodity trading, despite being asked to produce "Contract Notes” and details of brokers through whom these transactions were carried out at which platform viz. NCDEX MCX is not produced at the time of assessment proceedings..

15.4.1 We therefore hold that the ground raised on this issue of commodity transaction by the department is misplaced, being having no substance and as such this ground is rejected.

54 ITA No. 134 to 139/JODH/2025 ITA No. 306 and 328/JODH/2025 (Assessment Year 2014-15 to 2019-20) 16. In ground no.4 of the assesse pertains to confirmation of the addition of Rs.15,90,000/- u/s 68 of the Act on account of alleged commodity income on the basis of Exhibit 7 of Annexure AS and the department ground 6 pertains to restricting the addition of Rs.46,15,050/- to Rs.38,99,000/- without appreciating the fact.

16.1 The assessee based on a hand written diary seized vide Exhibit-7 of Annexure- AS, prepared cash inflow-outflow statement and computed the commodity income of Rs.23,10,000/-. The assessee considered those amounts where the narration is “Mill Se Aaye” as income, which are dated 05.04.2018 (Rs.2 lacs), 07.04.2018 (Rs.1 lacs), 08.04.2018 (Rs.1 lacs), 11.04.2018 (Rs.2 lacs), 03.05.2018 (Rs.4 lacs), 10.05.2018 (Rs.3 lacs) and 09.07.2018 (Rs.10,10,000/-). The AO observed that while working out the above income, the assessee has not considered the amount of Rs.23,05,050/- also noted in the diary and hence, he computed the income on the basis of this diary at Rs.46,16,050/-.

16.2 The Ld. CIT(A) after considering the explanation of the assessee, vide para 8.3, page 22-24, deleted the addition to the extent of Rs.7,16,050/- (3,06,000+97,250+3,12,800) and thus, confirmed the addition to the extent of Rs.15,90,000/- over and above to Rs.23,10,000/- accepted by the assessee. The breakup of the addition of Rs.15,90,000/- confirmed by Ld. CIT(A) is as under: -

55 ITA No. 134 to 139/JODH/2025 ITA No. 306 and 328/JODH/2025 (Assessment Year 2014-15 to 2019-20)

Page No. of Exhibit 7 Date Amount PB Sr. No. 1. 30 08.04.2018 1,45,000 111 2. 30 08.04.2018 2,85,000 111 3. 30 08.04.2018 60,000 111 4. 30 08.04.2018 60,000 111 5. 30 08.04.2018 50,000 111 6. 36 (back side) - 3,00,000 118 7. 36 (back side) - 25,000 118 8. 41 (back side) - 6,00,000 124 9. 43 09.07.2018 65,000 124(bac k) TOTAL 15,90,000

16.2.1 The Ld. DR supported the assessment order and contended that the ld CIT (A) has not appreciated the facts that during the assessment proceedings the undisclosed income to the tune of Rs.46,16,050/- have been included in his purported disclosure for which the A/R of the assessee has not adduced any explanation as to why the same were not included at the time of assessment proceedings.

16.3 The Ld. AR explained that the amounts mentioned at Sr. no. 1 to 5 all dated 08.04.2018, are payment amount and not the receipt amount. From the date wise incoming and payment statement placed (APB, Pgs. 125 to 139) it can be noted that all these amounts are reflected at payment side (APB, Pg. 136) and that the Ld. CIT(A)

56 ITA No. 134 to 139/JODH/2025 ITA No. 306 and 328/JODH/2025 (Assessment Year 2014-15 to 2019-20) has itself deleted the addition of Rs.97,250/- by holding that these entries represent expenses and not the income. According, we find merit in the argument of the AR that on the same analogy as adopted by the Ld. CIT (A) while deleting the addition of Rs.97,250/- by holding that these entries represent expenses, the disputed entries are payment and not income. Accordingly, the addition of these amounts totalling to Rs.6,00,000/- is deleted.

16.3.1 The amount mentioned at Sr. no. 6-7 are undated (APB. Pg. 118) but was for the month of November 2018. The narration of the entry of Rs.3,00,000/- is “gold item” and narration of entry of Rs.25,000/- is “Sofa-Bed”. The entry succeeding these entries of Rs.6,500/- is with the narration “paid to mistri”. All these amounts are payment and not receipt. In the date wise incoming and outgoing payment statement placed at APB, Pgs. 125 to 139, the same are reflected at payment side (APB, Pg. 138). The AO has not made addition of the amount of Rs.6,500/- and therefore, we hold that the addition of Rs.3,00,000/- and Rs.25,000/- made by him is uncalled for. As such, the addition of Rs.3,25,000/- is deleted.

16.3.2 Further, the AR state that the entry at Sr. no. 8 of Rs.6,00,000/- is undated (APB, Pg. 124), but AO has wrongly mentioned the date of 09.07.2018 which is a date mentioned on the prior page (APB, Pg. 123). In fact, the amount of

57 ITA No. 134 to 139/JODH/2025 ITA No. 306 and 328/JODH/2025 (Assessment Year 2014-15 to 2019-20) Rs.6,00,000/- comprises of 7 amounts of Rs.1,45,000/-, Rs.2,00,000/-, Rs.60,000/-, Rs.70,000/-, Rs.60,000/-, Rs.50,000/- & Rs.15,000/- with certain narration. They are the same amount with same narration, noted at page 30 of the annexure (APB, Pg. 111), comprising of 5 amounts. Under the facts and circumstances, this amount was rightly stated to be expenditure incurred on the marriage of Monu. In our view, this amount is incorrectly added by the AO and hence, the same is deleted.

16.3.3 Similarly, the entry mentioned at Sr. no. 10 dt. 09.07.2018 (APB, Pg. 124 back) is also of payment which is reflected in the incoming and payment statement (APB, Pg.139). Hence, this amount cannot be added to income of the appellant as explained above and therefore, the same is also deleted.

16.4 As regard to the relief of Rs.7,16,050/- (3,06,000+97,250+3,12,800) allowed by Ld. CIT(A), it was submitted that Rs.3,06,000/- represents the realisation of advances given earlier through Sampat Lahuti (APB, Pgs. 1-12), Rs.97,250/- represent the expenditure and not the receipt (APB, Pgs. 113-114) and Rs.3,12,800/- is only a rough noting (APB, Pg. 123). The Ld. CIT(A) as per the detailed reason given at para 8.3, page 22-24 of the order has rightly deleted the addition. Thus, the ground of the assesse is allowed and that of the department is dismissed.

58 ITA No. 134 to 139/JODH/2025 ITA No. 306 and 328/JODH/2025 (Assessment Year 2014-15 to 2019-20) 17. The ground no. 5 of the Department pertains to restriction of the addition of Rs.23,00,022/- to Rs.1,84,001- without appreciating the fact that the assessing officer clearly mentioned that during the assessment proceedings the transaction in the Parchi are not found verifiable from the books of the accounts.

17.1 Based on some hand written loose papers/slips seized as Exhibit 1 to 6 of Annexure-AS, in the statement, Shri Bhawani Singh stated with respect to the transaction indicated with code “H” at page no. 11,12,14,15,19,20,22,23,24,25 & 30 of Exhibit 1, explanation would be given by the assessee. It was explained during assessment proceedings, that transactions noted on these slips are duly recorded in books of accounts of group concern except few transactions which relates to the appellant. Supporting documents for verification of seized documents was submitted vide letter dt.10.02.2021 in the case of S.L. Nutrition Pvt. Ltd. The same was reproduced by the AO at page no.36 to 44 of the assessment order. After verification, AO held that certain transactions in the Parchi are not verifiable from the books of accounts. These Parchis are at page 19 of Rs.27,900/- and Rs.58,122/- (AO page 28), page 20 of Rs.2,90,000/- & Rs.10,00,000 (AO page 29), page 25 at Rs.9,24,000/- (AO page 32), aggregating to Rs.23,00,022/- for which addition was made u/s 68 of the Act.

59 ITA No. 134 to 139/JODH/2025 ITA No. 306 and 328/JODH/2025 (Assessment Year 2014-15 to 2019-20) 17.2 The Ld. CIT(A) held vide para 7.3 page 19 of the order, that the amount of Rs.23,00,022/- represents out of the sales, for which addition can be made only for the profit instead of the entire sales. Accordingly, the Ld. CIT (A) has been justified by applying G.P. rate of 8% on the unaccounted sale of Rs.23,00,022/-. Thus, addition was confirmed of Rs.1,84,001/- by applying G.P. rate of 8% and the balance addition of Rs.21,16,021/- was deleted.

17.3 The Ld. DR relied on the assessment order and submitted that CIT (A) was not justified in restricting the addition of Rs.23,00,022/- to Rs.1,84,001- without appreciating the fact that the assessing officer clearly mentioned that during the assessment proceedings the transaction in the Parchi are not found verifiable from the books of the accounts.

17.4. It is evident from the bare look of the copies of loose paper along with other entries recorded on these papers that the entries which could not be verified from the books of accounts, may represent unrecorded sale/ receipt against the unaccounted sales. When the AO has accepted that the very same entries which were verified by him are considered as representing the recorded sale, therefore, the remaining unverified entries would also be categorised nomenclature representing

60 ITA No. 134 to 139/JODH/2025 ITA No. 306 and 328/JODH/2025 (Assessment Year 2014-15 to 2019-20) unaccounted sales. We, therefore, hold that the Ld. CIT (A) was justified in considering the entries as unrecorded sales in the books.

17.4 In our view, the sales as such can’t be added to income of the assessee and we, therefore, find no reason to interfere in the decision the ld. CIT (A) in applying G.P. rate of 8% on such computed unrecorded sales and thereby confirming the addition of Rs.1,84,001/-. Thus, the order of Ld. CIT(A) on this issue is upheld and as such, the ground no. 5 of the department is rejected.

Order pronounced in the open court on 21/05/2026.

Sd/- Sd/- (SUDHIR PAREEK) (DR. MITHA LAL MEENA) JUDICIAL MEMBER ACCOUNTANT MEMBER Dated : 21/05/2026. Nimisha Sr. PS True Copy

61 ITA No. 134 to 139/JODH/2025 ITA No. 306 and 328/JODH/2025 (Assessment Year 2014-15 to 2019-20) Copies to : (1) The appellant. (2) The respondent. (3) CIT (4) CIT(A) (5) Departmental Representative (6) Guard File BY ORDER,