UMESH SABOO,JAIPUR vs. DEPUTY COMMISSIONER OF INCOME TAX-CENTRAL CIRCLE-2, JAIPUR

ITA 1270/JPR/2024Status: DisposedITAT Jaipur20 August 2025AY 2016-17100 pages
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What did the Tribunal hold?

The Tribunal decided on the issues as follows: Issue 1 (Void ab initio assessment order): This issue was raised as a ground of appeal but was not explicitly addressed or decided upon by the Tribunal in the provided extract. The judgment proceeds to discuss other grounds. Issue 2 (Addition on account of undisclosed brokerage): The Tribunal did not provide a specific finding or decision on this issue in the provided extract. The discussion focuses on the addition related to diamond jewellery. Issue 3 (Applicability of Section 115BBE): The Tribunal did not provide a specific finding or decision on this issue in the provided extract. The discussion focuses on the addition related to diamond jewellery. Regarding the addition of Rs. 7,63,278/- on account of unexplained diamond/precious stones (discussed under ground no. 5 by the assessee, which seems to be a separate issue from the numbered grounds): The Tribunal found force in the assessee's argument that the addition was made solely because the valuation shown in the wealth tax return differed from the valuation undertaken at the time of search. The Tribunal noted that there was no finding by the lower authorities that the weight and items declared in the wealth tax return were not the same as those found. The mere existence of a difference in valuation, without a finding that the assessee purchased additional diamonds thereafter and remained unaccounted for, does not warrant an addition. Therefore, the addition of Rs. 7,63,278/- was directed to be deleted. This observation led to ground no. 5 being allowed. Operative Directions: The addition of Rs. 7,63,278/- on account of unexplained diamond/precious stones is deleted. The appeals are partly allowed.

What were the facts?

The assessee, Umesh Saboo, filed two appeals before the ITAT Jaipur against the orders of the CIT(A)-5, Jaipur, for assessment years 2016-17 and 2017-18. These appeals arose from assessment orders passed under section 143(3) read with section 153A of the Income Tax Act, 1961, by the DCIT, Central Circle-2, Jaipur. The proceedings were initiated following a search and seizure action under section 132 on the Chandra Prakash Agarwal Group, of which the assessee is a member. A notice under section 153A was issued, and the assessee filed a revised return declaring a higher income, including undisclosed income. The assessee's income sources include salary, house property, business, and other sources, with a significant portion from finance brokerage. Incriminating documents related to loan transactions and brokerage income were seized during the search.

What were the issues?

1. Whether the assessment order passed under section 143(3) read with section 153A of the Income Tax Act, 1961, is void ab initio and deserves to be quashed. 2. Whether the CIT(A) erred in sustaining the addition of Rs. 52,27,172/- out of Rs. 60,52,172/- made by the AO under section 68 of the Income Tax Act, 1961, on account of alleged undisclosed brokerage received. 3. Whether the CIT(A) erred in confirming the AO's action in applying section 115BBE of the Income Tax Act, 1961, which the assessee contends is not applicable. Assessee's Contentions: Regarding issue 1, the assessee argued that the assessment order under section 143(3)/153A is void ab initio. Regarding issue 2, the assessee contended that the addition on account of undisclosed brokerage was wrongly sustained. Regarding issue 3, the assessee argued that section 115BBE is not applicable to his case. Revenue's Contentions: The judgment does not explicitly record the revenue's contentions on all grounds. However, in relation to the addition of Rs. 7,63,278/- on account of unexplained diamond jewellery (which appears to be a separate issue discussed later in the judgment, not explicitly numbered as an issue above), the revenue contended that the CIT(A)'s findings were based on considering all assessee's contentions and should be confirmed. The AO's comments stated that the excess diamond jewellery remained unexplained and CBDT Instruction No. 1916 dated 11-05-1994, which pertains to gold jewellery, does not cover diamonds/precious stones.

Which sections of the Income-tax Act were involved?

Section 143(3),Section 153A,Section 68,Section 115BBE,Section 132,Section 133A,Section 127,Section 139(1),Section 271AAB,Section 142(1),Section 132(4),Section 245D(4),Section 69

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Income Tax Appellate Tribunal, JAIPUR BENCHES,”B” JAIPUR

Before: DR. S. SEETHALAKSHMI, JM & SHRI RATHOD KAMLESH JAYANTBHAI, AM

For Appellant: Shri S. L. Poddar, Adv
Hearing: 30/06/2025Pronounced: 20/08/2025

Heard together (2 matters)

ITA. No. 1270/JPR/2024
ITA. No. 1271/JPR/2024

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PER: RATHOD KAMLESH JAYANTBHAI, AM By way of separate two appeals filed by the a

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