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

fu/kZkj.k o"kZ@Assessment Years : 2017-18 cuke Umesh Saboo Deputy Commissioner of Vs. 657, Jai Lal Munsi Ka Rasta, Income Tax, Central Circle-2, Chandpole Bazar, Jaipur Jaipur. LFkk;h ys[kk la-@thvkbZvkj la-@PAN/GIR No.: ADGPS6659C vihykFkhZ@Appellant izR;FkhZ@Respondent fu/kZkfjrh dh vksj ls@ Assessee by : Shri S. L. Poddar, Adv. jktLo dh vksj ls@ Revenue by : Mrs. Alka Gautam, CIT-DR a lquokbZ dh rkjh[k@ Date of Hearing : 30/06/2025 mn?kks"k.kk dh rkjh[k@Date of Pronouncement : 20/08/2025 vkns'k@ ORDER PER: RATHOD KAMLESH JAYANTBHAI, AM

By way of separate two appeals filed by the above named assessee, challenges the separate orders of the Learned Commissioner of Income Tax (Appeal)- 5 Jaipur [for short CIT(A) ] both dated 11.10.2024 and relates to the assessment years 2016- 17 and 2017-18, which in turn arise from the two separate assessment orders dated 21.12.2018 & 22.12.2018 passed under section 143(3) r.w.s. 153A of the Income Tax Act,1961 [ for short “Act” ] by the DCIT, Central Circle-2, Jaipur. [ for short AO].

2. With the consent of the parties both these appeals were heard together and are disposed off with this common order. First, we take up the appeal of the assessee in wherein the assessee has raised the following grounds: - “1. In the facts and circumstances of the case the Learned CIT(A) has erred in confirming the action of the Learned Assessing Officer in passing the order u/s 143(3)/153A of the Income Tax Act, 1961 which is void ab-initio and deserves to be quashed.

2. In the facts and circumstances of the case, the Learned CIT(A) has erred in sustaining the addition of Rs. 52,27,172/- out of Rs. 60,52,172/- made by the Learned Assessing Officer u/s 68 of the Income Tax Act, 1961 on account of alleged undisclosed brokerage received.

3. In the facts and circumstances of the case, the Learned CIT(A) has erred in confirming the action of Learned Assessing Officer in applying the section 115BBE of the Income Tax Act, 1961 which is not applicable in the case of the assessee.

3.1 Pursuant that action notice under section 153A of the Act dated 06-03-2017 was issued and served upon the Assessee on 09-03-2017 requiring him to file a true and correct return of income as prescribed under Rule 12 of the Income Tax Rules, 1962 within 15 days of the service of the said notice. In response to the said notice(s), a return declaring an income of Rs. 1,18,96,630/- was filed by the Assessee on 24-03-2017. In the return of income originally filed by the Assessee u/s 139(1) of the Act on 30-09-2016 an income of Rs. 8,96,630/- was declared. It pertinent to mention here that the search operation relevant to this case has been conducted on 28-07-2016 i.e. FY 2016-17 relevant to AY 2017-18 but due date for filing the Return of Income u/s 139(1) of the I.T.

Act was due as on date of search hence as per clause (b)(ii) of within the definition of 'specified year'. The total income declared in the ROI for the 'specified year' included the undisclosed income of Rs. 1,10,00,000/- which represented the undisclosed income.

3.2 The assessee primarily derives its income from Salary, House property, Business and Other sources. The assessee is a finance broker and earned brokerage income in his proprietary concern M/s Vihan Associates. Statutory notice as required u/s. 143(2) of the Act and notice u/s 142(1) were also issued to the assessee and information and details pertaining to the case relevant to assessment of his income were called by means of a questionnaire.

3.3 While search proceeding some incriminating documents were found and seized. The same was inventoried as Annexure - A, Exhibit 1(Page no. 3-5, 12, 14, 17, 19, 20, 24, 26-29 & 37), Exhibit- 2, (Page no. 1, 6-8, 13, 14, 16, 17, 102, 107, 110, 112 & 114-123), Exhibit-3 (Page no. 42-50 & 53-55), Exhibit-4 (Page no. 1 to 8), Exhibit-5 (Page no. 2 to 14, 16, 17, 19 & 20), Exhibit-14 (Page no. 4 to 7) and Exhibit-16 (page no. 3 to 9). These pages contains the details of loan transactions and brokerage income earned thereon.

Ld. AO based on that details of transaction calculated unaccounted order. In the search proceeding while recording the statement the assessee vide question no. 45 admitted that figures written in circles are in lakhs of rupees. He further admitted that he provides the loan for minimum 2 months and difference of amount of interest received from one party and paid to other party is his unaccounted brokerage income. During the recording of the statement the assessee was also confronted with the documents found during the search proceedings which he admitted as his document and furnish his explanation thereon the relevant part of the statement of the assessee. Accordingly, the assessee was asked to furnish his explanation on the aforesaid documents. He was asked to explain how the brokerage income on the transaction found in aforesaid documents and the receipts were accounted for and get verified from his regular books of accounts. Failing to which he was also asked to show cause as to why these receipts and brokerage as mentioned tabulated in the order not be considered as unexplained receipts and unaccounted brokerage. In compliance the assessee furnished reply on 27-11-2018.

Ld. AO after considering the reply of the assessee noted that the assessee has challenged the proposed brokerage rate @ 0.30 submitted that brokerage rate in the market is @ 0.10 per hundred between unknown parties and @ 0.50 paisa per hundred Known parties. He also gave reference to the search case of Ramesh Mahinar and Manmohan Bagla stating that the department has accepted brokerage rate @ 0.10 paisa per hundred. The contention of the assessee was verified and found that the department has accepted the brokerage rate at 1.2% per annum of the loan amount in the case of Shri Ramesh Chand Maheshwari and Shri Manmohan Krishan Bagla Group and Income Tax Settlement Commission [ ITSC ], passed the order u/s 245D(4) of the I.T. Act, considering the brokerage rate @ 1.2% per annum (i.e. 0.1% of the loan). Since the department accepted this rate for the transaction between the known and unknown person hence brokerage rate was considered @ 0.10 paisa per hundred in each transaction of the assessee which has found not to be recorded in his regular books of accounts. In the reply filed the assessee contended that in respect of Exhibit-5 the brokerage on the transaction mentioned was not received till date. He further claimed that in the trade of finance brokerage is never received in all the cases. However, the contention was not found tenable since the assessee himself no. 58 that the brokerage received on the transaction mentioned in Exhibit- 4 & 5 was received by him which has not been recorded in his regular books of accounts. Thus, that plea of the assessee was not considered. Ld. AO also not considered the contention that the period for the loan should not be 12th month as the assessee failed to furnish details of each transaction along with the specified period for which these transaction were made. Therefore, in absence of any documentary evidence benefit of period cannot be allowed to the assessee and those cases where period has not been mentioned were considered at 12 months for computation of unaccounted brokerage.

Ld. AO went on to examine the reply for the Exhibit-2, 3, 4, 5, 14 & 16, wherein the assessee submitted out of these Exhibits some of entries are declared and duly accounted for in regular books of accounts in various concern of the assessee namely Vihan Associate, B & S Company, Shrinath Associates, Bee Ess Financial Services Pvt. Ltd. The assesssee also submitted that number of entries are repetitive. However, same has been considered as separate and independent transactions in the show cause issue. The assessee also furnished Exhibit wise bifurcating the transaction under three difference head.

1. Transaction which are recorded in books of account.

2. Transaction which are repetitive.

3. Transaction on which brokerage not received.

Ld. AO examined that reply and working given by the assessee and thereby he made the following observations :

(a) In the exhibit-2, at page no. 112 detail of interest receipt amounting to Rs. 1,24,46,600/- is mentioned but the assessee could not verified these transaction from his regular books of accounts and also has not included the same in the transaction on which brokerage has not been booked. Therefore, these transactions to the extent to Rs. 1,24,46,600/- has to be taken under those transaction on which brokerage has not been accounted for in regular books of accounts (b) In the exhibit-4, at page no. 3 & 5, the assessee has failed to verify the transaction amounting to Rs. 95,00,000/- and Rs. 10,00,000/- respectively and claimed that these page are not clear. Therefore, he did not considered these amounts under those transaction on which brokerage has not been accounted for. However, on perusal of the same are found readable hence the contention of the assessee is unfounded and transaction has to be taken under those transaction on which brokerage has not been accounted for in regular books of accounts. (c) In the exhibit-5, at page no. 13 the assessee has claimed the transaction of Rs. 1,25,00,000/-is duly recorded in the books of the M/s Bee Ess Financial Services Pvt. Ltd. However the same is not acceptable as M/s Bee Ess Financial Services Pvt. Ltd. is a NBFC company wherein the assessee is one of the director. M/s Bee Ess Financial Services Pvt. Ltd. advanced the loan to various persons and received interest thereon. Now the question arises why these transaction were recorded by the assessee in his books inventoried as Exhibit-5. The assessee has himself admitted in the statement recorded u/s 132(4) of the I.T. Act that the transaction recorded in Exhibit-5 have not been recorded in the regular books and brokerage income earned on these transaction is his undisclosed income. Considering these facts it is clear that assessee has provided unsecured loan from the company M/s Bee Ess Financial Services Pvt. Ltd. to Shri Dhirmendra Agarwal and Shri Ram Babu Agarwal in capacity of the Director of the company and earned brokerage on the same which is his undisclosed income.

(d) Further, in Exhibit-5 at page no. 16,17,19 & 20 and Exhibit-4, page no. 7 & 8 the transaction recorded has not been considered by the assessee under those transaction on which brokerage has not been offer for taxed and claimed these transaction are cheque return entries which has already been considered. However, the claim not found verifiable as the transaction recorded in these page has not been found in other page which has been taken for consideration. For a instance transaction mentioned at page no. 16 in the name of M/s Doramon Distributor Pvt. Ltd. to M/s Adity Propcon Pvt. Ltd. for Rs. 30,00,000/- has not been found recorded in other documents. Similarly in another instance of transaction from M/s Paras Gems to M/s Maa Chandi Stone Crushing for Rs. 1,50,00,000/- no such entry was found in other documents. Hence the contention of the assessee that these are entries of return of cheque which has already been considered elsewhere not found verifiable. Accordingly brokerage earn on the same is undisclosed income of the assessee.

3.4 After considering the reply of the assessee and perusal of the submission along with seized documents on the test check basis, the transaction mentioned in show cause were hereby categorized under three different heads namely duplicate transaction, recorded transaction in books of accounts and the transaction on which brokerage has not been accounted for in regular books of accounts. Thereafter, the total unaccounted brokerage on these transactions was derived considering the brokerage rate @ 0.10 paise per hundred per month. Based on that working the year wise unaccounted brokerage income summarized as under:-

S. No. AY Unaccounted transaction Unaccounted brokerage. 1. 2015-16 12,75,00,000 15,30,000 2. 2016-17 1,42,30,81,000 1,70,52,172

3. 2017-18 1,90,41,00,000 92,42,800 Therefore, since the unaccounted income for the year was derived at Rs. 1,70,52,172/- was considered as undisclosed brokerage income of the assessee during the AY 2016-17. Since the assessee has offered undisclosed brokerage Income for AY 2016- 17 amounting to Rs. 1,10,00,000/- in his statement recorded u/s 132(4) of the Act and honored the same in ITR of AY 2016-17.

Therefore, ld. AO made the addition of the balance amount of Rs. 60,52,172/- (Rs. 1,70,52,172/- minus Rs. 1,10,00,000/-) as his undisclosed brokerage income u/s 68 of the I.T. Act and taxed at 30% as per provision of section 1158BE of I.T. Act.

4. Aggrieved, from the said order of assessment, assessee preferred first appeal before the ld. CIT(A). The ld. CIT(A) after hearing the contention of the assessee has partly allowed the appeal of the assessee by giving the following findings:-

“”4. Ground of appeal No. 1 is related to validity of order passed by the AO u/s 143(3) r.w.s. 153A of the Income Tax Act, 1961. …………… 4.2 I have considered the facts of the case and written submissions of the appellant as against the observations/findings of the AO in the assessment order for the year under consideration. The contentions/submissions of the appellant are being discussed and decided as under:- 4.2.1 This ground of appeal is related to validity of assessment order. This ground of appeal has no merits. The proceedings u/s 153A of the Income-tax Act, 1961 were initiated against the assessee after conducting the search u/s 132 of the I. T.Act, 1961. The AO had passed the order as per the provisions of section 143(3) r.w.s. 153A of the I.T.Act, 1961 and after obtaining the approval of competent authority as mandated u/s153D of the I.T.Act, 1961. Further, the order passed u/s 153A of the I.T.Act, 1961 was passed on the basis of incriminating documents seized during the search proceedings. Moreover, the appellant has failed to explain the entries of the seized material from his regular books of account and with his total receipts of income shown in return of income. Thus, ground of appeal 1 is hereby dismissed.

5. Ground of Appeal No. 2 is related to addition of Rs. 60,52,172/- u/s 68 of the Income Tax Act, 1961 on account of alleged undisclosed brokerage received. 5.1 During the appellate proceeding before me the appellant made written submission as under:- During the appellate proceedings, the appellant has submitted his reply in respect of pending appeal. The same has been placed in file. The reply is bulky, hence not made the part of the order. The reply of the appellant has been considered and discussed in the body of the order. 5.2 Decision: 5.2.1 On perusal of the assessment order, it is noticed that the AO had considered the reply of the assessee in reference to seized documents and after considering the same the AO had categorized the transaction mentioned in show cause under three different heads namely duplicate transaction, recorded transactions in books of account and the transactions on which brokerage had not been accounted for in regular books of accounts. Thereafter total unaccounted brokerage on those transactions was derived considering the brokerage rate @ 0.10 paisa per hundred per month. The AO had made a table of complete working of brokerage and made the part of the assessment order. 5.2.2 In the assessment order, the AO has clearly mentioned that in the exhibit-2, at page no. 112 detail of interest receipt amounting to Rs. 12,44,66,000/- was mentioned but the assessee could not verify this transaction from his regular books of accounts and also had not included the same in the transaction on which brokerage had not been booked.

Therefore, those transactions to the extent to Rs. 12,44,66,000/- had to be taken under those transaction on which brokerage had not been accounted for in regular books of accounts. On this ground, the AO had calculated undisclosed brokerage of Rs. 14,93,592/- considering the rate of brokerage @10 paisa per hundred per month and made this addition, the part of the total addition of undisclosed brokerage for the A.Υ.2016- 17. 5.2.2 During the appellate proceedings, the appellant has submitted that the learned AO did not consider the actual nature of documents and entries recorded on page no. 112 exhibit 2 which is only estimated/projected calculations of interest for various parties for the amount routed through him as a broker. These calculations are also and repeatedly appearing in other seized documents and there it has been considered while calculating the summary of total income. Since this paper was only calculation and not actual transactions. Therefore, for calculation of unaccounted brokerage income this document was considered because the entries on this paper are also appearing in other documents. It tantamount to the double addition. Because all the entry on this paper are reflected somewhere else in other documents which has been considered for calculation of unaccounted brokerage income. 5.2.3 I have considered the objection raised by the appellant, and on perusal of the assessment order and submission of the appellant, it is noticed that the some of the entries recorded on page no. 112 are reflecting on other pages of seized material. After verifying the same, a detailed working has been prepared for duplicate entries on other pages of seized material as under:-

S. From To Annexure Exhibit Page Amount Remarks No. No.

1 Star point Anukul Annexure- Exhibit- Part 1000000 Construction Power A 2 of Ltd. Pvt. 104 Ltd.

The few entries of page No.112 were not found in any other pages of the seized material, hence those entries were not considered as duplicate entries and those entries are not considered as duplicate entries in the above table. Further the entries of page No.112 which were also reflecting on page No.102 has not been considered as duplicate entries. As on perusal of the working in respect of page no. 102 in the assessment order, it is noticed that the AO had considered total amount of page no.102 of Rs. 26,35,00,000 and the AO had allowed the credit of Rs. 12,75,00,000 as amount of duplicate entries and calculated the brokerage income on total transaction of Rs. 13,60,00,000 only. During the course of appellate proceedings, the appellant had not provided any detailed working in respect of duplicate entries and only provided the copies of some pages of seized material as Annexure A Page 1-8. In absence of any detailed working, it is not possible to differentiate the duplicate entries of page no. 112 reflecting on page no.102 and which were already not considered by the AO as the AO had already allowed the credit of Rs. 12,75,00,000 as amount of duplicate entries on this page. Conclusion: On the basis of above discussion and calculation made in the above table, it is evident that the total entries of Rs. 6,87,50,000 in respect of page No.112 are duplicate entries and the same had been considered in other pages of seized material as described in the above table. Total Brokerage on Duplicate Entries of Rs. 6,87,50,000 @ 0.10 paisa per hundred per month works out of Rs.8,25,000/- Accordingly, the addition made by the AO of Rs. 14,93,592/- as undisclosed brokerage is restricted to Rs.6,68,592/- and the appellant is allowed a relief of Rs.8,25,000/- in respect of duplicate entries of page no.112 as the same had been considered in other pages of seized material for calculation of brokerage. 5.2.4 Further appellant has objected the addition of Rs. 42,000/- in respect of entries at page no.3 & 5 of Exhibit-4 of Rs. 95,00,000/- and Rs. 10,00,000/- The appellant has submitted in his reply that in para (b) the learned AO has mentioned that page no. 3 and 5 the assessee has failed to verify the transaction amounting to Rs. 95 Lakhs and Rs. 10 Lakhs. If the brokerage amount for both the entries are considered then it is only Rs. 38,000/- (paper book page 42) and Rs. 4,000/- (paper book page 43) total Rs. 42,000/- which can be added more either in assessment year 2016-17 or assessment year 2017-18. In other reply, the appellant has submitted that the notings of the paper is dumb and deaf for these transactions. Thus, the addition made is surmises and conjectures, wrong and bad in law and may kindly be deleted. Conclusion: On perusal of the assessment order, it is noticed that the AO had considered the above transactions related to A.Y.2017-18 and not made any addition in the assessment order pertaining to A.Y.2016-17. Hence, the issue is not discussed in this order. 5.2.5 Further, the appellant has objected the addition of brokerage of Rs. 1,50,000/- in respect of transaction between M/s Bee Ess Financial Services Pvt. Ltd. and Shri Dharmendra Agarwal and Shri Ram Babu Agarwal of Rs. 1,25,00,000/-. The appellant has submitted in his reply that in para (c) the learned AO has f mentioned that the transaction of Rs. 1,25,00,000/- is duly recorded in the books.of M/s Bees Ess Financial Services Pvt Ltd and this is assessee's own company for which no brokerage has been charged from the persons to whom advances have been given. The learned AO has mentioned that brokerage was charged from Shri Dharmendra Agarwal and Shri Ram Babu Agarwal on these transactions. The claim of the learned AO was without any material or evidence. The learned AO did not make any enquiry from Shri Dharmendra Agarwal and Shri Ram Babu Agarwal whether any brokerage was charged by the assessee for loan given by M/s Bee Ess Financial Services Pvt Ltd or not. Therefore the observation of the learned AO is not based on any material or evidence and it is only assumption of the learned AO. It is matter of common concern that the assessee cannot charged the brokerage on the transaction of his own concerned or company. Because M/s Bee Ess Financial Services Pvt Ltd is a NBFC company and it cannot lend money through the brokers or it cannot be assumed that the assessee charged brokerage on his own transaction. Therefore, the addition deserves to be deleted. On perusal of the assessment order, it is noticed that the AO had clearly mentioned in the assessment order that in the exhibit-5, at page no. 13, the assessee had claimed the transaction of Rs. 1,25,00,000/- was duly recorded in the books of the M/s Bee Ess Financial Services Pvt. Ltd. However the same was not acceptable as M/s Bee Ess Financial Services Pvt. Ltd. was a NBFC company wherein the assessee was one of the Director. M/s Bee Ess Financial Services Pvt. Ltd. advanced the loan to various persons and received interest thereon. Now the question arises why these transactions were recorded by the assessee in his books inventoried as Exhibit-5. The assessee had himself admitted in the statement recorded u/s 132(4) of the I.T. Act that the transaction recorded in Exhibit-5 had not been recorded in the regular books and brokerage income earned on this transaction was his undisclosed income. Considering these facts it was clear that assessee had provided unsecured loan from the company M/s Bee Ess Financial Services Pvt. Ltd. to Shri Dharmendra Agarwal and Shri Ram Babu Agarwal in capacity of the Director of the company and earned brokerage on the same which was his undisclosed income. Conclusion: I have considered the reply and the finding of the AO in the assessment order. On perusal of the same, it is a clear fact that M/s Bee Ess Financial Services Pvt. Ltd. is a NBFC, It is one of the important work of the finance company to provide loans. M/s Bee Ess Financial Services Pvt. Ltd. is an independent identity to provide loans and loans provided by the company may be entered in the accounts of the company. The appellant is a finance broker and the entries entered in the seized material indicate his transactions which were routed through him in lieu of brokerage. There is no reason of such entries in the seized record of the appellant without any personal interest. If Shri Dharmendra Agarwal and Shri Ram Babu Agarwal was able to fulfil all the conditions of loan then they can get loan easily from the finance company directly. There may be certain reason of involvement of the appellant in these transactions of loan. It cannot be accepted that this transaction had taken place without any personal interest of the appellant or brokerage. Only such two entries clearly establish an unhidden agenda of the appellant. Hence, the contention of the appellant is not acceptable that the assessee cannot charge the brokerage on the transaction of his own concerned or company. On the basis of above discussion and the facts of the case, contention of the appellant is not acceptable. Accordingly, I uphold the addition made by the AO of brokerage of Rs.1,50,000/- in respect of transactions between M/s Bee Ess Financial Services Pvt. Ltd. and Shri Dharmendra Agarwal and Shri Ram Babu Agarwal of Rs.1,25,00,000/-. 5.2.6 Further, the appellant has objected the addition of Rs.24,69,600/-of unaccounted brokerage on the basis of seized documents Annexure-4 Page No.7 & 8 and Annexure-5 Page No. 16,17,19 & 20. During the course of appellate proceedings, the appellant has submitted that in para (d) the learned AO further mentioned that in exhibit -5 at page no. 16,17,19 & 20 and exhibit -4 page no. 7 & 8 are claimed by the assessee as cheque to be returned on due date entries for control and management of financial transactions. The assessee has submitted the documents in support of his contention which has not been considered. Now the documents are placed on paper book page no. 81 to 88. Seized as Annexure 'A' exhibit-4 and 5 which are index and control register for loan transactions where the assessee made entries for each transaction month wise and in exhibit -5 on page 16 onward all the entries are for cheques to be returned back after completion of loan period routed through the assessee. This narration is also mentioned on page 15 of same annexure 4. So these are the details which is mentioned/prepared for control purpose that the period of loans has been expired on a particular date and same has to be returned back. Therefore the contention of the learned AO for making addition was not correct and justified and was without any evidence that the assessee has earned brokerage income on these transactions and not accounted-for for the completed transactions. Because all these transactions are memorandum entries. On all the transactions brokerage income has already been considered in working submitted by the assessee. Paper book page no. 90 to 94, These transactions are the very same transaction which has been noted by the assessee for return to the lender on due date. The learned AO has not made any enquiry for the same and made the addition which deserves to be deleted. The learned AO has considered page no. 16 and 20 of exhibit-5 for making addition in the year under consideration and calculated the unaccounted brokerage income on the basis of these two papers for Rs. 24,69,600/- which deserves to be deleted.

On perusal of the assessment order, it is noticed that the AO had clearly mentioned in the assessment order that in Exhibit-5 at page no. 16,17,19 & 20 and Exhibit-4, page no. 7 & 8 the transaction recorded had not been considered by the assessee under those transaction on which brokerage had not been offer for taxed and claimed these transaction were cheque return entries which had already been considered. However, the claim not found verifiable as the transaction recorded in these page had not been found in other page which has been taken for consideration. For a instance transaction mentioned at page no. 16 in the name of M/s Doramon Distributor Pvt. Ltd. to M/s Adity Propcon Pvt. Ltd. for Rs. 30,00,000/-has not been found recorded in other documents. Similarly in another instance of transaction from M/s Paras Gems to M/s Maa Chandi Stone Crushing for Rs. 1,50,00,000/- no such entry was found in other documents. Hence the contention of the assessee that these are entries of return of cheque which had already been considered elsewhere not found verifiable. Accordingly brokerage earn on the same is undisclosed income of the assessee. Conclusion: I have considered the reply of the appellant and the finding of the AO in the assessment order. In this regard my findings are as under.

1. In the reply, the appellant has submitted that in exhibit -5 at page no. 16,17,19 & 20 and exhibit -4 page no. 7 & 8 are claimed by the assessee as cheque to be returned on due date entries for control and management of financial transactions. Now the documents are placed on paper book page no. 81 to 88. Seized as Annexure 'A' exhibit-4 and 5 which are index and control register for loan transactions where the assessee made entries for each transaction month wise and in exhibit -5 on page 16 onward all the entries are for cheques to be returned back after completion of loan period routed through the assessee. In the reply the appellant has submitted that in the above pages all the entries are for cheques to be returned back after completion of loan period routed through the assessee. This language shows that the transaction of cash loan had taken place and cheques were taken as security. But neither the AO nor the appellant has accepted any cash transactions. ……………………….. On perusal of the above entries and the confirmation by the appellant some of the facts are notices 1. When cheque has been issued by the Trilochna Dealtrade Pvt. Ltd. to Shree Khishna Vatika Housing Pvt.Ltd. at the time of giving loan then at the time of return of loan cheque should be issued by Shree Khishna Vatika Housing Pvt. Ltd. to Trilochna Dealtrade Pvt. Ltd. But in the instant case cheque return entry is the same as at the time of cheque given.

2. Same entries cannot be there in cheque issue and cheque return entry in any particular case.

3. Such entries can only be there when the cash loan had been given and the cheque was given as security and the same was return on completion of cash loan. In this case neither the AO nor the appellant had accepted any cash transactions.

4. In the above confirmation, no TDS has been deducted.

5. In the above confirmation amount of Rs.20,00,000/- was received through RTGS and Rs. 10,00,000/- was returned by cheque and Rs. 10,95,016/- was returned through RTGS. In these circumstance cheque issue and cheque return entries do not justify the real purpose and the existence of cheque return entry.

6. During the course of appellate proceedings none of the entry was get verified by the appellant with the bank statement entries.

7. In these circumstances, the contention of the appellant is not acceptable that these are cheque return entries.

3. In the other pages, the appellant has claimed for cheque given and cheque return, one another case is as under: Exhibit-5 Page No.6 ………………………… In the above page one of the entry is dated 01/04/2015 Starpoint Construction Pvt. Ltd. to Okay Plus International Ltd. - 85 As per the interpretation of the appellant, this is the cheque given entry vide which a cheque of Rs.85 lakh had been given by Starpoint Construction Pvt. Ltd. to Okay Plus International Ltd. As this is the entry of 01.04.2015, this shows that earlier such loans were given and this is the opening balance. Exhibit-5 Page No.17 …………… On perusal of the above pages, it is clear that the above loan was returned on as under:

24/06/2015 25Lakh ---07/2015 20 Lakh 06/02/2016 40 Lakh On the basis of above facts, this is clear that the above entries are not cheques but the entries related to unaccounted cash loan. As no cheque was issued by the recipient, hence these entries cannot be considered as cheque return entry.

4. The appellant has also submitted a confirmation from anukriti Builders and Developers, which was issued in favour of Lalik Kumar Dhoka. The copy of the same is as under:_ ……………….. In the above page the entire as on 01.04.2015 is Lalit Kumar dokha to Anukriti Debuilder & Developers of Rs. 60 Lakh. On perusal of the confirmation and the entry in the seized material, it is clear that in the seized material cheque issue entry is not related to issue of any cheque but the details of pending loan. Exhibit-5 page No. 16. ……………………. Accordingly, entry in the above page is not cheque return but the details of return of the pending loan and it is also clear from the entry that the interest was pending.

On perusal of the facts mentioned by the AO are evident that the entries on the above pages are no return entries but the fresh entries and are different from the entries which are on other pages of Exhibit-4 & 5. If these were the return entries then there should be some entries in the seized documents to establish the genuineness of loan or cheque given, but no such entries were found. During the course of appellate proceedings, the appellant has not argued or submitted any facts opposing the findings of the AO. On the basis of above facts, it is clear that the entries in seized material Exhibit -5 at page no. 16,17,19 & 20 and Exhibit -4 page no. 7 & 8 are not related to any cheque return but only the entries related to financial transactions. Further, during the course of appellate proceedings, the appellant has failed to substantiate his claim with any documentary evidences such as the verification of the transactions with bank statements. Moreover, appellant has failed to justify the deduction of TDS and deposit of the same in Central Government Account, with documentary evidences. On the basis of the above discussion and the facts of the case, I confirm the addition made by the AO of Rs.24,69,600/- as brokerage on the transactions mentioned on the pages of seized material Exhibit -5 at page no. 16 & 20 for the Α.Υ.2016-17. 5.3 On the basis of above discussion, the final figures of additions against all the objections raised by the appellant and discussed in the above paras of the order are as under:

Page No. Addition Decision: Relief or Remarks made by the Addition Increase AO confirmed/dele ted/ reduced/enhan ced

Exhibit -2, 1493592 Reduced (-)825000 The addition made by Page No. the AO of Rs.14,93,921- 112 as undisclosed brokerage restricted is to Rs.6,68,592/- and the appellant is allowed a relief of Rs.8,25,000/-

Entries ate 4200 N.A. N.A. The AO considered had page No. the above transactions related to A.Υ.2017-18 3&5 of Exhibit-4 of and not made any Rs. addition in the 95,00,000/ assessment pertaining Α.Υ.2016-17. and Rs. order to 10,00,000/- Hence, the issue is not discussed in this order.

Entries at 150000 Confirmed - - page No. 13 of Exhibit-5 of Rs.25,00,0 00/- and Rs.1,00,00, 000 in respect of transaction between M/s Bee Ess Financial services pvt. Ltd. and Shri Dharmendr a Agarwal and Shri Ram Babu Agarwal.

Exhibit-5 at 2469600 Confirmed - - Page No. 16 & 20

During the course of appellate proceedings, the appellant has raised objections only against the addition of brokerage of Rs.41,13,192/- (1493592 + 150000 + 2469600) as against the addition made by the AO of Rs. 60,52,172/-(Rs. 1,70,52,172/-minus Rs. 1,10,00,000/-) for the A.Y. 2016-17.

On the basis of above details, the appellant gets a relief of Rs.8,25,000/- . Thus, out of total addition made by the AO of Rs. 60,52,172/-, the addition of Rs. 52,27,172/-is hereby confirmed.

6. Ground of Appeal No. 3 is related to charging tax u/s 115BBE in relation to the addition for alleged undisclosed brokerage received.

6.1 Further the appellant had also taken ground for not applying tax rate as per section 115BBE in relation to the addition for alleged undisclosed brokerage received. The argument is not acceptable. Section 115 BBE was inserted by Finance Act 2012 w.e.f 01.04.2013 with an intention to tackle with people who shows their black income as white by paying less tax. Therefore any income for which assessee would not be able to explain the source, the taxability on such income will as per the provisions of section 115BBE of the I.T.Act, 1961. Section 115BBE of the I.T.Act, 1961 has provided for 30% tax on income referred to in Sections 68, 69, 69A, 69B, 69C and 69D of the I. T.Act, 1961. In the instant case AO has made addition u/s 68 of the Income Tax Act, 1961, thus the AO had correctly applied section 115BBE of the I.T.Act, 1961 and accordingly the ground raised by the appellant regarding this issue is dismissed.

7. The last Ground of Appeal is that the assessee craves your indulgence to add amend or alter all or any grounds of appeal before or at the time of hearing. The appellant has not added, amended, altered and modified any of the above-mentioned grounds of appeal. Accordingly, such mention by the appellant in its ground is treated as general in nature, no needing any specific adjudication and is accordingly treated as dispose off.

8. In the result, the appeal is treated as partly allowed.”

5. Feeling dissatisfied from the above order of the ld. CIT(A) the assessee preferred the second appeal before this tribunal. Apropos to the grounds so raised by the assessee, ld. AR of the assessee relied upon the following written submission which is reproduced here in below :-

“BRIEF FACTS OF THE CASE The assessee is an individual, having income from salary, house property, business and other sources. For the year under consideration, return declaring total income of Rs. 896630/- was filed on 30/09/2016. Copy of acknowledgement of return is available on Paper Book Page No.

disclosing income of Rs. 1,18,96,630/- overrides the return filed on 30/09/2016, wherein only income of Rs. 8,96,630/- was disclosed. Copy of acknowledgement of return filed along with computation of income is available on Paper Book Page No. 2-4. In the return so filed on 24/03/2017 in response to notice u/s 153A, the assessee included surrendered income on lump sum basis in order to purchase peace of mind at Rs. 1,10,00,000/- as admitted in the statement recorded u/s 132(4) on 30/07/2016. The assessment stands completed on total income of Rs.1,79,48,800/-, vide order u/s 143(3) r.w.s. 153A dated 21/12/2018. While framing the assessment, the Learned Assessing Officer made an addition of Rs. 60,52,172/- as brokerage income by invoking Sec. 68 of the IT Act, 1961. Aggrieved with the assessment order, the assessee preferred appeal before the Learned CIT(A). The Learned CIT(A), Jaipur-5, Jaipur, vide order dated 11/10/2024, partly allowed the appeal of the assessee by giving a relief of Rs. 8,25,000/- out of total addition of Rs. 60,52,172/- made by the Learned Assessing Officer and sustained the balance addition of Rs. 52,27,172/- on account of undisclosed brokerage income added under section 68 of the IT Act, 1961 by the Learned Assessing Officer. The Learned CIT(A) has erred in sustaining the addition of Rs. 52,27,172/- without considering the detailed submission made by the assessee. A copy of the submission is available on paper book page no.5-15. Aggrieved with the order of the Learned CIT(A), the assessee is in appeal before the Hon'ble Tribunal. The individual grounds of appeal are discussed hereunder :- Ground No.1 In the facts and circumstances of the case, the Learned CIT(A) has erred in confirming the action of the Learned Assessing Officer in passing the order u/s 143(3)/153A of the Income Tax Act, 1961, which is void ab initio and deserves to be quashed. NOT PRESSED. Ground No.2 In the facts and circumstances of the case, the Learned CIT(A) has erred in sustaining the addition of Rs. 52,27,172/- out of Rs. 60,52,172/- made by the Learned Assessing Officer u/s 68 of the Income Tax Act, 1961 on account of alleged undisclosed brokerage received. It is submitted that during the course of search in the group case, including the assessee, loose papers were found and seized from the premises of the assessee. It is submitted that these loose papers pertained to brokerage on finance. The brokerage business is not done by the assessee individually, but by following concerns : 1) Bee Ess Financial Services P. Ltd 2) M/s Shrinath Associates, partnership firm 3)Giriraj Pd. Saboo, HUF

However, the Learned Assessing Officer has considered these loose papers in the hands of the assessee. These loose papers contained details of financial transactions, on which the assessee earned brokerage income. On the basis of these loose papers, the Learned Assessing Officer calculated that total brokerage worked out at Rs. 1,70,72,172/-. After giving credit of Rs. 1,10,00,000/- surrendered by the assessee, addition was made of Rs. 60,72,172/-. In appeal, the Learned CIT(A) has granted relief of Rs. 8,25,000/-. For the balance addition, the assessee is in appeal before the Hon'ble ITAT. It is submitted that the additions have wrongly been sustained by the Learned CIT(A) without considering the reply of the assessee. The additions sustained by the Learned CIT(A) are assailed on the following grounds :-

(1) Brokerage has wrongly been added (Para 5.2.5 of CIT(A)"s order (Exhibit

5. Page No. 13) The facts in respect of this para are that the assessee is director in NBFC company M/s Bee Ess Financial Services Pvt. Ltd. The company advanced Rs. 1,25,00,000/- to Shri Ram Babu Agarwal (Rs.1,00,00,000) and Shri Dharmendra Agarwal (Rs.25,00,000). The company charged interest from both these persons and the same has been accounted for in the regular books of account of the company. Since the assessee was a director in the company, there was no occasion for charging any brokerage from its own company on this amount. This plea of the assessee, although submitted both before the Learned Assessing Officer as well as before the Learned CIT(A), did not find any favour. The Hon'ble Tribunal is requested to consider the fact that common sense does not allow charging commission on funds advanced by the company, where the assessee is a director. In view of this, addition sustained to the extent of Rs. 1,50,000/- on this count deserves to be deleted. (2) Cheques returned wrongly considered as advances Para 5.2.6. of CIT(A)'s order (Exhibit

5. Page No. 16 & 20)(Addition Rs.24,69,000) During the course of assessment proceedings, while explaining the entries of the aforesaid pages 16 & 20 of Exhibit 5, it was submitted before the Learned Assessing Officer that these relate to cheques received back against loans and advances made earlier, on which brokerage has already been added/ surrendered. These very pages have notings on top of it that the particulars are in respect of cheque returns. Copies of these pages are available on paper book page no.16-21.The case of the assessee is that once when brokerage has been charged on the amount advanced through the assessee, then brokerage cannot charged again when the amount is returned back. The particulars of cheque returned fully stand supported by the copy of account of the respective parties. Copies of these accounts are available on Paper Book Page No. 22-40.The Learned Assessing Officer, thus, has wrongly charged brokerage of Rs. 24,69,000/-. This is appearing on page 23 of the assessment order and the relevant entry is " Annexure A, Exhibit 5, Page No. 16 and Page No.20". It is submitted that the Learned Assessing Officer has erred in making the addition and further Learned CIT(A) has also wrongly sustained the same (Page 24 of the appellate order of Learned CIT(A). The addition, therefore, deserves to be deleted. The Learned CIT(A) has sustained the addition on the ground that the amount of returned cheques entries was not found recorded elsewhere as advance given. In other words, the Learned CIT(A) has doubted that whether brokerage had been disclosed on the amount advanced or not, against which these cheques have been received back. In this regard, it is the submission of the assessee that in no circumstances brokerage can be charged on amounts which have been returned through cheques. Brokerage can only be charged on amounts advanced and not on amounts returned. Therefore, the Learned CIT(A) was wrong and unjustified in sustaining addition on a wrong ground. In this regard assessee is submitting a detailed chart taking sample entries from seized exhibits. From each exhibit 4 to 5 entries of one page have been taken for detailing when the amount was advanced and where such entries is mentioned and as well as when the amount has been returned and on what page the same is mentioned. The particulars of this chart go to establish that the Learned Assessing Officer has erred in charging brokerage on amounts of cheques returned whereas the brokerage already stood charged at the point of time when the amount was advanced. A copy of this chart is available on Paper Book Page No.41.An example is cited from this chart - The first entry of this table is of Anukriti Builders and Developers. A cheque of Rs. 60 Lakhs was given by Anukriti Builders & Developers to Lalit Kumar Dhoka on 01.04.2015. This entry is available on page 5 exhibit 5 and assessee surrendered brokerage on this amount. The amount of Rs. 60 Lakh has been returned on 01.05.2015. This entry is available on exhibit 5 page 16. The Learned Assessing Officer has again charged brokerage on this entry dated 01.05.2015 treating it as a fresh loan. The submission of the assesse is that when brokerage already stood surrendered as per entry on exhibit -5 page 5 i.e. when the amount of Rs. 60 Lakh was advanced on 01.04.2015 there was no occasion for charging brokerage again when the amount of 60 Lakh was returned on 01.05.2015 and the entry regarding this is recorded on exhibit -5 page 16. The assessee is further submitting confirmation of the concerned party. It is the submission of the assessee that entries appearing on page 16, 17, 19 & 20 of exhibit and page 7 & 8 of exhibit- 4 contained details of amounts returned by cheques which were earlier advanced and on which brokerage already stood surrendered. Thus the addition made by the Learned Assessing Officer and sustained by the Learned CIT(A) is in fact of the nature of double addition. It is further submitted that the Learned Assessing Officer has further committed blunder in charging brokerage for the period of 12 months whereas the amount of advances were for part of the year in most of the cases. It is hardly in one or cases that the amount of advanced remained for the whole year otherwise, in most of cases the amount remained for 2-3 months. The Learned Assessing Officer committed this mistake of charging brokerage for more months on amounts advanced as well as on amounts when these were returned. Thus there is double addition on this account also. As against brokerage of Rs. 1,05,64,523/- the Learned Assessing Officer made addition of Rs. 60,52,172/-(1,70,52,172 – 1,10,00,000) of brokerage. It is the submission of the assessee that the total brokerage that was required to be added was Rs. 1,05,64,523/-. Against this assessee had already surrendered brokerage income of Rs. 1,10,00,000/-. Thus no addition was required to be made. In fact assessee had surrendered more amount of brokerage of Rs. 1,10,00,000/- whereas the brokerage chargeable worked out only Rs. 1,05,64,523/-. It is further submitted that the Learned Assessing Officer has calculated brokerage of Rs. 1,70,52,172/- including the amounts of cheque returned as well as brokerage has been charged for whole year whereas the amount advanced remained only for part of the year. It may be stated that last two entries of this chart indicate that for page 16 and 20 of exhibit -5 which contain details of entries of cheque returned, the Learned Assessing Officer has charged brokerage of Rs. 12,18,000/- ( exhibit-5 page 16) and Rs. 12,51,600/- (exhibit-5 page 20). Thus the Learned Assessing Officer has overcharged Rs. 24,69,600/- (1218000+1251600) on amounts of cheque returned as found noted on page 16 & 20 of exhibit -5. Further the Learned Assessing Officer has overcharged brokerage on account of period of loan taking the same for the whole year whereas the amounts did not remain for the whole year on account of this the brokerage overcharged is Rs. 38,08,049/-. Further the Learned Assessing Officer has also charged brokerage of Rs. 2,10,000/- on amount of Rs. 1,75,00,000/- advanced to Dharmendra Agarwar and Ram Babu Agarwal by M/s Bee Ess Financial Services Pvg Ltd where the assessee is a director and as such there was no question of charging brokerage. The following table will make the things more clear – 1 Brokerage calculated by the Learned 17052172 Assessing Officer 2 Less: Brokerage charged pertaining to -2469600 amounts of cheque returned exhibit 5 page 16 & 20 3 Less: brokerage charged on amount -210000 advanced by Bee Ess Financial Services Pvt Ltd 4 Less: brokerage overcharged on account -3808049 of period of loan Total 10564523

The brokerage calculated by the assessee is also of Rs. 1,05,64,523/- whereas assessee already surrendered an amount of Rs. 1,10,00,000/-. Thus no addition on this account was called for. The Learned Assessing Officer made addition of Rs. 60,52,172/- which has been reduced to Rs. 52,27,172/- by the Learned CIT(A) which also deserves to be deleted. The working is available on Paper Book Page No. Page no.41-46. This is so far as the chart furnished by the assessee is concerned. In view of this the addition of Rs. 52,27,172/- sustained by the Learned CIT(A) deserves to be deleted. (3) Wrong charging of brokerage of whole year as against for few months.

It is further submitted that the pages 7 & 8 of Exhibit 4 and pages 16, 17, 19 & 20 of Exhibit 5 are in respect of entries reflecting return of cheques of advances given earlier. These pages were not to be considered for charging brokerage. As submitted in the foregoing para, brokerage can be charged only on amount advanced and not on amount returned. Further, the Learned Assessing Officer has also erred in charging brokerage for the whole period whereas the amount remained advanced for a part of the year. This fact is supported by the details of cheque returns, which disclose that amounts have been returned earlier and before the completion of an year. The same are also supported by the copy of the relevant ledger account of the parties.

It is submitted that the assessee submitted a detailed chart showing calculation of brokerage as per Assessing Officer containing mistakes of periods because in most of the cases, the Learned Assessing Officer has wrongly charged brokerage for the whole year instead of few months for which the amount remained advanced. These facts are self- evident in the papers found and seized, particularly the pages containing the details of cheque returns (Exhibit 4 & 5). The chart available on Paper Book discloses that the Learned Assessing Officer has charged brokerage amounting to Rs. 1,70,52,172/- (Page 24 of the assessment order). As against this, the correct amount of brokerage chargeable comes to Rs. 1,04,09,556/-. The difference in discrepancy is on account of the fact of charging of brokerage by the Learned Assessing Officer for the whole year instead of a few months. Now the relief required by the assessee works out as under :- 1 Total addition by the Learned Rs.1,70,52,172 Assessing Officer 2 Less Surrendered by the assessee Rs.1,10,00,000

Balance addition Rs. 60,52,172 3 Relief allowed by CIT(A) Rs. 8,25,000 4 Net addition after order of CIT(A) Rs. 52,27,172

Thus, the entire addition sustained by the Learned CIT(A) deserves to be deleted. The Learned CIT(A) has wrongly mentioned on Page 26 of the appellate order that against total addition of Rs. 60,52,172/- made by the Learned Assessing Officer, the assessee raised objections before him only of the amount of Rs. 41,13,192/- and not against the total addition of Rs. 60,52,172/-. This observation of the Learned CIT(A) is far from facts. The assessee had submitted a paper book containing 94 pages which also contains the above chart charging brokerage of Rs. 1,70,52,172/- as against correct amount of Rs. 1,04,09,556/-. In the face of this chart, it did not behoove the Learned CIT(A) to have made above wrong observation. The Hon'ble ITAT is humbly requested to delete the addition sustained by the Learned CIT(A). 4) Sec. 68 wrongly invoked by the Learned Assessing Officer In this regard, it is submitted that the addition made by the Learned Assessing Officer by invoking provisions of Section 68 of the Income

Tax Act is illegal, unlawful and unjust. The provisions of Sec 68 of the IT Act, 1961 are quoted as under :- ”Cash credits.

It is submitted that the Hon'ble Supreme Court of India has held as under in the case of CIT Vs. P. Mohanakala (2007) 291 ITR 278 that the provisions of Sec. 68 stipulates as under and shall be applicable on fulfilling the following conditions :- (i) There has to be a credit entry in the books of accounts of the assessee ; (ii) The books of account have to be of the previous year ; (iii) No explanation is submitted or explanation furnished is not found satisfactory.

In the case of the assessee, the provisions of Sec. 68 are not applicable because for the relevant assessment year, the business of brokerage was not carried individually by the assessee and no books of account were maintained by the assessee. In view of this, there were no credit entries in the books of accounts which could have been considered by the Learned Assessing Officer. Further, in the case of the assessee, the entries found on loose papers are pertaining to brokerage. These are not accounted for in the books of the assessee. These are not credit entries in the books of the assessee. As such, the provisions of Sec. 68 were not applicable. The additions were wrongly made by the Learned Assessing Officer in invoking provisions of Sec.

68. Additions having been made under wrong section deserves to be deleted. Ground No.3 – In the facts and circumstances of the case, the Learned CIT(A) has erred in confirming the action of the Learned Assessing Officer in applying the Sec. 115BBE of the Income Tax Act, 1961 which is not applicable in the case of the assessee.

As discussed above, the provisions of Sec. 68 were not applicable to the facts of the case because in the relevant assessment year, the business of brokerage was not carried individually by the assessee and no books of account were maintained by the assessee. The entries found on loose papers are pertaining to brokerage and these are not accounted for in the books of the assessee. Even otherwise, the brokerage income was to be assessed under the head "business income" and not u/s 68. Therefore, the Learned Assessing Officer has erred in invoking Sec. 115BBE in this case. The Learned CIT(A) has also erred in confirming the action of the Learned Assessing Officer. The Hon'ble ITAT is requested to delete the addition made u/s 68 and give consequential relief by directing not to invoke provisions of Sec. 115BBE in the case of the assessee.

It is submitted that the rate of 60% applied by the Learned Assessing Officer invoking provisions of section 115BBE on income surrendered by the assessee on account of brokerage is unlawful and illegal. The brokerage income is apparently out of business income and hence, provisions of section 115BBE were not applicable. The following case laws are quoted in support – (1) Lakhmichand Baijnath Vs CIT (1959) 35 ITR 416 (Hon’ble Supreme Court) : The Hon’ble Supreme Court observed that the credits were found in the business accounts of the assessee and the explanation as to how the amounts came to be received was rejected, such credits can be treated as business income. (2) Daulat Ram Rawatmal Vs. CIT 64 ITR 593 (Hon’ble Supreme Court): When there is nothing on record that the assessee had any other source of income other than business income, it is reasonable to hold that any amount representing secret income arose out of the business of the assessee. (3) Jadhav Kangralkar Builders Vs. ACIT, Satara (ITA No.12106/PUN/2017 (ITAT, B Bench, Pune) dt 26/8/2020 – AY 2013-14 During the course of survey, additional income of Rs.1,06,32,791/- was offered on the basis of incriminating documents. The Hon’ble ITAT held that the entire income disclosed was attributable to business activity. (4) Ram Swaroop Singhal Vs. ACIT,Sriganganagar (ITA No.145/Jodh/2018 dated 25/05/2018) AY 2014-15 (ITAT, Jodhpur) During the course of survey u/s 133A, assessee offered income of Rs. 10,90,000/- on account of incriminating documents, discrepancy in stock and excess cash found during survey. The assessee disclosed the surrendered income of Rs. 10,90,000/- in the return of income filed for AY 2014-15 as income from business. The Hon’ble ITAT accepted the version of the assessee and held that lower authorities were not justified in taxing the surrendered income u/s 69 of the IT Act. (5) Pr. CIT Alwar Vs. Bajargan Traders (ITA No.258/2017 order dated 22/9/2017 – Hon’ble Rajasthan High Court In this case, unrecorded stock of 70,04,814/-, unrecorded debtors of Rs.11,95,000/-, unrecorded investment in construction of godown Rs.19,20,000/- and excess cash of Rs.7,30,000/- was found during the course of survey. It was held by the Hon’ble High Court that once the income was offered during survey as business income, the same cannot be treated as income from other sources and provisions of Sec. 69 will not be applicable. (6) Amitabh B Parekh Navsari Vs. Department of Income Tax (ITAT Ahmedabad (ITA No.3138/Ahd/2008 dated 21/01/2011 AY 2005-06 In this case, the Hon’ble ITAT upheld the decision of CIT(A) holding as under :- “..The AO has not disputed the fact that the appellant firm had made proper entry in the books of accounts of Rs.67,51,994/- being additional income declaring showing the excess stock of Rs. 62,86,624/- and excess cash found Rs.3,09,370/- and renovation expenses of Rs.1,56,000/- during the course of survey as income from business and part of the book profit as included under the business head accordingly and reflected in the audited Profit and Loss account also. If the AO was of the view that the explanation furnished by the assessee firm regarding excess stock found, excess cash found and renovation expenses which represented business income of the current year, was found to be not acceptable or untrue, the AO should have given reason to dispute the assessee’s version as to the source being other than business income. No material has been brought on record either by the survey party or by the AO to disprove the appellant’s contention regarding the only source of the firm being business income. It has not been brought out on record that the appellant firm is doing some other activities from which such income was earned and the excess stock, excess cash found and the expenditure on renovation of shop represented the income from such other source.” (7) Mansfield & Sons Vs.CIT (1963) 48 ITR 254 (Hon’ble Calcutta High Court) Where a credit entry is found in the business accounts of an assessee and the explanation as to how the amount came to be received is rejected by the IT authorities and the amount is taken to be income from an undisclosed source, such income can be treated as business income if the assessee has no other source of income. (8) Bhuwan Goyal Vs. DCIT Cen.Circle, Ludhiana (ITA No.1385/Chd/2019) ITAT, Chandigarh dated 28/09/2020

The Hon’ble ITAT held that surrender of income of Rs.4.64 crores during the course of search on the basis of a pocket diary was to be treated as business income of the assessee and the ld. CIT(A) was not justified in directing to apply provisions of Sec. 69/155BBE. (9) Shri Harish Sharma Vs. ITO, Ludhiana (ITA No.327/Chd/2020) order dated 11/5/2021 ITAT, Chandigarh

In this case, during the course of survey, a note book was found containing entries of cash collection of Rs.10 lacs. The assessee surrendered the same and filed return of income accordingly. The AO treated the declared amount of Rs. 10 lacs as unexplained u/s 68 and applied the provisions of Sec. 115 BBE. The ld. CIT(A) confirmed the action of the ld. AO. However, the Hon’ble ITAT held that provisions of Sec. 68 were not applicable and the income declared by the assessee was to be treated as business income on which provisions of Sec. 115BBE were not applicable. (10) Bajaj Sons Ltd Vs. DCIT (ITA No.1127/Chd/2019 AY 2017-18 dated 25/5/2021) ITAT Chandigarh

In this case, the Hon’ble ITAT held that provisions of Sec. 68, 69, 69A. 69 B, 69 C are not attracted on the surrendered income to cover any discrepancy as the AO could not point out any discrepancy. It was also held that provisions of Sec. 115BBE could not be invoked in the matter.

In view of the above facts and circumstances of the case, the Learned Assessing Officer has wrongly applied the provisions of section 115BBE of the Income Tax Act, 1961, and the Learned CIT(A) has also wrongly confirmed the action of the Learned Assessing Officer.

Ground No.4 – The assessee craves your indulgence to add, amend or alter all or any grounds of appeal before or at the time of hearing. The Hon'ble Tribunal is requested to consider the submissions and case laws cited by the assessee and decide the appeal in favour of the assessee.”

Sr. Particulars Page No. No. 1. Copy of acknowledgement of original return filed on 30/09/2016 1 2. Copy of acknowledgement of return filed u/s 153 A on 24/3/2017 2-4 along with computation 3. Copy of submission filed before the CIT(A) 5-15 4. Copy of Page No.15-20 of Exhibit 5 16-21 5. Chart along with confirmations in respect of cheques returned 22-40 6. Chart along with actual working of brokerage income 41-46

7. While starting the argument ld. AR of the assessee submitted that he do not intend to press ground no. 1. So far as the ground challenging the addition he vehemently argued that ld. CIT(A) has not considered the in detailed submission made by the assessee explaining as to why the addition made by the ld. AO is sustainable and he has given relief of Rs. 8,25,000/- only. He submitted that when the cheque written was evidently clear how can a person will give the brokerage on it. This fact has not been considered by the lower authorities. The ld. CIT(A) has not considered even the period of loan the computation of the brokerage on loan. The assessee has surrendered a sum of Rs. 1,10,00,000/- as against the correct amount of Rs. 1,04,09,556/- therefore, the addition sustained by the ld. CIT(A) for an amount of Rs. 52,27,172 is also required to be deleted. He therefore, supported his arguments based on the written submission placed on record.

“Sub:- Appeal before Hon'ble ITAT, Jaipur in (Α.Υ. 2016-17) in the case of Umesh Saboo, Jaipur (ADGPS6659C)- regarding. Respected Mam, Kindly refer to your letter vide No. CIT (DR-II)/ITAT/JPR/2025-26/289 dated 28.05.2025. In reference to the above point wise comments are being submitted as bellow:- 1. List (attached as Annexure- A) of material seized during the course of search and seizure action carried out on 28.07.20216 on Chand Prakash Agrawal group of which the assessee was one the parties who were covered u/s 132 of the act 2. Contention of assessee that additions of Rs. 60,52,172/- are explained and recorded in the books of account is not found tenable, comments on these issues are as under:- 1. Comments/Report on addition of Rs. 60,52,172/- on account of unaccounted brokerage income: During the search action conducted at the business premises of the assessee at 310, Ratna Sagar, MSB Ka Rasta, Johari Bazar, Jaipur, wherein some incriminating documents were found and seized. It is also pertinent to mention here that following conclusions were also drawn from the statements recorded u/s 132(4) of the assessee during the search & seizure action:- (i) Figures written are in lakhs of rupees and loan has been provided for minimum 2 months. (ii) Commission was fixed @0.10% and difference between the fixed interest rate and the actual interest rate received, (iii) Commission/brokerage income earned is not recorded in the regular books of account of the assessee. During the assessment proceedings assessee submitted that brokerage rate in the market @0.10% between unknown parties and @0.5% in known partics, contention of the assessee was accepted by the assessing officer in this regard. Further, it is also notable that in those cases where period of loan has not been mentioned, period of 12 months was taken for computation of unaccounted brokerage During the assessment proceedings the assessee submitted that in Exhibits -2, 3, 4. 5. 14 & 16. some of entries are declared and duly accounted for in regular books of accounts in various concern of the assessee namely Vihan, B & S Company, Shrinath Associates, Bee Ess Financial Services Pvt. Ltd. The assesssee also submitted that number of entries is repetitive. The assessee also furnishes the details Exhibit wise bifurcating the transaction under three difference head.

1. Transaction which are recorded in books of account.

2. Transaction which are repetitive.

2.1 comments on contentions raised in paper book submitted as Annexure-A and Annexure-B are as under:- (i) Brokerage has wrongly been added:- In this connection it is submitted that the Ms/ Bee Ess Financial Services Pvt. Ltd. is a NBFC and its work of the finance company to provide loans. M/s Bee Ess Financial Services Pvt. Ltd. is an independent identity to provide loans and loans provided by the company may he entered in the accounts of the company. The assessee is a finance broker and the entries entered in the seized material indicate his transactions which were routed through him in lieu of brokerage. There is no reason of such entries in the seized record of the assessee without any personal interest. If Shri Dharmendra Agarwal and Shri Ram Babu Agarwal was able to fulfill all the conditions of loan then they can get loan easily from the finance company directly. There may be certain reason of involvement of the appellant in these transactions of loan. It cannot be accepted that this transaction had taken place without any personal interest of the assessee or brokerage. Only such two entries clearly establish an unhidden agenda of the appellant. Hence, the contention of the appellant is not acceptable that the assessee cannot charge the brokerage on the transaction of his own concerned or company. (ii) Cheques returned wrongly considered as advanees: The contentions of the assessee on this ground are not acceptable as AO had clearly mentioned in the assessment order that in Exhibit-5 at page no. 16,17,19 & 20 and Exhibit-4, page no. 7 & & the transaction recorded had not been considered by the assessee under those transaction on which brokerage had not been offer for taxed and claimed these transaction were cheque return entries which had already been considered. However. the claim not found verifiable as the transaction recorded in these page had not been found in other page which has been taken for consideration. For a instance transaction mentioned at page no. 16 in the name of M/s Doramon Distributor Pvt. Ltd. to M/s Adity Propcon Pvt. Ltd. for Rs. 30,00,000/- has not been found recorded in other documents. Similarly in another instance of transaction from M/s Paras Gems to M/s Maa Chandi Stone Crushing for Rs. 1,50,00,000/- no such entry was found in other documents. Hence the contention of the assessee that these are entries of return of cheque which had already been considered elsewhere not found verifiable. Further, in paper book submitted assessee failed in produce any documentary evidences to oppose the findings of the assessing officer. Report is submitted for your kind perusal.” Based on the above submission ld. DR supported the order of the ld. CIT(A).

Record reveals that ld. AO after considering the seized material, submission of the assessee derived that based on the record the undisclosed income of the assessee should have been for all the year would be:

S. No. AY Unaccounted Unaccounted brokerage. transaction 1. 2015-16 12,75,00,000 15,30,000 2. 2016-17 1,42,30,81,000 1,70,52,172 3. 2017-18 1,90,41,00,000 92,42,800

It is also not under dispute that the assessee has offered a sum of Rs. 1,10,00,000/- based on the disclosure made in the statement recorded and the same has been adhered to while filling the ITR in response to notice u/s. 153A of the Act. Thus, the dispute which is assailed before us that for an amount of Rs.

52,27,172/-. The same is arrived as under: Income determined by the ld. AO Rs. 1,70,52,172/- Less : Income offered by assessee Rs. 1,10,00,000/- Balance disputed before ld. CIT(A) Rs. 60,52,172/- Relief granted by the ld. CIT(A) Rs. 8,25,000/- Balance under dispute before us Rs. 52,27,172/-

Before us the ld. AR of the assessee submitted that a chart stating as to why the addition is required to be deleted. The said chart reads as follows:

1 Brokerage calculated by the Learned Assessing Officer 17052172 2 Less: Brokerage charged pertaining to amounts of cheque -2469600 returned exhibit 5 page 16 & 20 3 Less: brokerage charged on amount advanced by Bee Ess -210000 Financial Services Pvt Ltd 4 Less: brokerage overcharged on account of period of loan -3808049 Total 10564523

He submitted that as against the income of Rs. 1,05,64,523/- as computed the assessee has already disclosed a sum of Rs.

1,10,00,000/- and therefore, the addition sustained by the ld. CIT(A) is required to be deleted. Based on that fact now deal the part which the ld. AR of the assessee deducted from the amount of undisclosed commission computed by the ld. AO.

The first deduction made by the assessee is based on the exhibit 5 page 16 & 20 placed on record in the paper book page 16 – 21. The bench noted that the first page 16 itself write as “return cheques”. In the proceeding before the ld. AO was given sufficient opportunity to submit his comments on the contention raised by the assessee since the matter was heard in detail on 25.03.2025 and the request of the ld. DR the time was given to ld. AO for his comments on the contention raised by the assessee. The said report filed by ld. DR vide covering letter dated 30.06.2025. On this cheque return commission computed by the assessee ld. AO reported as under :-

“(ii) Cheques returned wrongly considered as advanees: The contentions of the assessee on this ground are not acceptable as AO had clearly mentioned in the assessment order that in Exhibit-5 at page no. 16,17,19 & 20 and Exhibit-4, page no. 7 & & the transaction recorded had not been considered by the assessee under those transaction on which brokerage had not been offer for taxed and claimed these transaction were cheque return entries which had already been considered. However. the claim not found verifiable as the transaction recorded in these page had not been found in other page which has been taken for consideration. For a instance transaction mentioned at page no. 16 in the name of M/s Doramon Distributor Pvt. Ltd. to M/s Adity Propcon Pvt. Ltd. for Rs. 30,00,000/- has not been found recorded in other documents. Similarly in another instance of transaction from M/s Paras Gems to M/s Maa Chandi Stone Crushing for Rs. 1,50,00,000/- no such entry was found in other documents. Hence the contention of the assessee that these are entries of return of cheque which had already been considered elsewhere not found verifiable. Further, in paper book submitted assessee failed in produce any documentary evidences to oppose the findings of the assessing officer.” We note from the above factual report of the ld. AO that he confirm the fact that seized material page 16 transaction in the name of M/s. Doramon Distributors Private Limited to M/s. Adity Propcon Private Limited for Rs. 30,00,000/- has not been recorded in other documents it self suggest that when it is clearly a case of cheque returned how the same be found recorded in the books.

Similarly transaction of Rs. 1,50,00,000/- from M/s Paras Gem to M/s. Maa Chandi Stone Crushing he also confirmed on that no such entry was found in other documents. Thus, the contention raised by the assessee how can be verifiable when the cheque were not realized and the facts contended by the assessee were not controverted even for those two transactions referred to by the ld. AO. Therefore, we do not find any reason to sustain the addition for Rs. 24,69,600/-. for an amount of Rs. 2,10,000/-. On this aspect we have gone through the report of the ld. AO wherein the ld. AO contended that “There is no reason of such entries in the seized record of the assessee without any personal interest.” As is not dispute that the assessee is engaged in the business of finance broker and he arranged a loan for a company where is a director. The transaction is recorded through the bank account if that company had paid the brokerage to the assessee it would be definitely found recorded in that company. There is no such finding at the time of assessment or that in the remand proceeding that he has find anything contrary to the submission of the assessee. The contention is merely surmises and conjectures that if the assessee is not receiving the commission why he has recorded the same. When the assessee is a director in a company how he claim the brokerage of in addition to the services which the company is paying to him and if it would have been the same would have been claimed by that company has deductible expenditure and thus, we find force in the argument of the ld. AR of the assessee and therefore the said amount is required to be deducted from the undisclosed income computed by the ld. AO. to be on account of the fact that the ld. AO has computed the brokerage for 12 months instead of period of loan and thereby that income was computed excess by the ld. AO. On this aspect of the matter we note form the report of the ld. AO that he chooses to remain silent on the issue. Whereas, the assessee vide page 41- 46 placed on record a detailed working referring to each page of seized material and the period for which the loan was given and thereby the computation of the period of loan he has computed the commission which in fact is computed at Rs. 1,05,64,523/- considering the monthwise brokerage and Rs. 1,04,09,556/- based on the number of days the loan was outstanding. This detailed working placed on record by the assessee which is not controverted there is no reason to submit any further evidence by the assessee except this working based on the seized material.

Not only that ld. AO did not find it controvert that working. The bench noted that as against the brokerage income offered as computed as above at Rs. 1,04,09,556/- or that of Rs. 1,05,65,523/- the assessee has already offered Rs. 1,10,00,000/- and therefore, we see no reason to sustain the addition of Rs. 52,27,172/- and therefore, the same is directed to deleted. In the result the appeal of the assessee in is allowed.

1. In the facts and circumstances of the case the Learned CIT(A) has erred in confirming the action of the Learned Assessing Officer in passing the order u/s 143(3)/153A of the Income Tax Act, 1961 which is void ab-initio and deserves to be quashed.

2. In the facts and circumstances of the case, the Learned CIT(A) has erred in sustaining the addition of Rs. 2,90,24,638/- out of Rs. 2,95,23,161/- made by the Learned Assessing Officer u/s 68 of the Income Tax Act, 1961 and Rs. 2,60,000/- enhanced without any basis without serving any notice u/s 251(2) of the Act out of Rs. 1,23,76,888/- on account of alleged unexplained income and Rs. 1,71,46,276/- on account of alleged undisclosed brokerage and interest income earned.

3. In the facts and circumstances of the case, the Learned CIT(A) has erred in confirming the addition of Rs. 52,42,800/- made by the Learned Assessing Officer u/s 68 of the Income Tax Act, 1961 on account of alleged undisclosed brokerage received on the basis of exhibit - 2,3,4,5,14 and 16 found during search.

4. In the facts and circumstances of the case, the Learned CIT(A) has erred in confirming the addition of Rs. 2,65,025/- made by the Learned Assessing Officer u/s 68 of the Income Tax Act, 1961 on account of alleged undisclosed income on the basis of cash found during the course of search.

5. In the facts and circumstances of the case, the Learned CIT(A) has erred in confirming the addition of Rs. 7,63,278/- made by the Learned Assessing Officer u/s 69 of the Income Tax Act.

6. In the facts and circumstances of the case, the Learned CIT(A) has erred in confirming the action of Learned Assessing Officer in applying the section 115BBE of the Income Tax Act, 1961 which is not applicable in the case of the assessee.

11. At the outset of hearing of the present appeal the bench noted that the ground no. 1 is not pressed by the assessee and therefore, the same is dismissed as not pressed.

Ground no. 3 raised by the assessee is similar to the ground no. 2 raised by the assessee in and therefore, it is not imperative to repeat all the facts, arguments / contention of the parties and finding that we have given in ground shall apply mutatis mutandis to the Ground no. 6 is consequential in nature and ground no. 7 being general in nature does not require our finding.

“5.2 Decision: 5.2.1 On perusal of the assessment order, it is noticed that on the basis of findings in seized material Annexure-A, Exhibit-1 and after considering the reply of the assessee, the certain observations were made by the AO, which were discussed in the assessment order. Accordingly, the AO had made an addition of Rs.2,95,23,161/-(Rs. 1,23,76,888/- and Rs. 1,71,46,273/- on account of unexplained income and undisclosed brokerage & interest income of the assessee respectively) in the total income of the assessee u/s 68 of the I.T.Act, 1961 and taxed at 60% as per provision of section 115BBE of I.T. Act. 5.2.2 Further, it is noticed that the AO had considered the submission of the assessee and briefly discussed all the points in detail in the assessment order. 5.2.3 I have considered the objection raised by the appellant, accordingly the additions made by the AO and the submission of the appellant is discussed and decided as under: - (1) Annexure-A, Exhibit-1, Page. No.- 3: On perusal of the assessment order, it is noticed that on the above page transaction amounting to Rs. 1,32,50,000/- were mentioned and considering the reply and the facts of the case, the AO had made an addition of Rs.1,00,000/- as undisclosed interest and Rs.20,000/-as undisclosed brokerage in the transaction between S.L.Poddar & Co. and N.K.Polimers. The AO had clearly mentioned in the assessment order that the transaction between S.L. Poddar & Co. to N.K. Polymers had not found recorded in the books of the assessee. Further, the assessee in the statement recorded question no. 45 admitted that he earned the brokerage on the transaction as well as interest @0.50% which was the difference of interest rate @ 1.50% on which interest was received and interest @ 1% was paid which was computed as under. Interest 0.50% on Rs. 1 crores for 2 months = Rs. 1,00,000/-. Brokerage 0.10% on Rs. 1 crores for 2 months = 20,000/- Hence interest of Rs. 1,00,000/- and brokerage of Rs. 20,000/- was undisclosed income of the assessee. During the course of appellate proceedings, the appellant has submitted that Page no. 3 (Annexure-A, Exhibit-1) Addition of unaccounted brokerage income and interest income of Rs. 120000/-. Page no. 3 is available on additional paper book page no.

1. In this regard the assessee submits that the first entry on top of left is loan given by M/s S.L. Poddar and Company to M/s N.K. Polymers and Additives Manufacturing Company for Rs. 1 Crore. The rate of interest payable is @ 1% per month and the party objected that if you want to continue this loan then next time the interest rate would be more by 50- 60 paisa per 100 and finally it was settled that if amount is renewed then the rate would be @ 1.20% per month. All the transactions are by cross account payee cheques. Confirmation of the party is available on additional paper book page no. 2 and the entries on brokerage income is recorded in the books of M/s Shreenath Associates. Inspite of the above submission the learned AO has made the addition of Rs. 120000/- on this account. The assessee has not charged difference of interest from the party N.K. Polymers. It was only proposal of the lender which has not been materialized and amount has been returned. Therefore this addition is to be deleted. Actual working is available on paper book page no. 90 to 94. Conclusion: I have considered the findings of the AO and the reply of the appellant. On perusal the statement of the appellant taken u/s132(4) of the I.T.Act, 1961 during the search proceedings, it is a clear fact that the transaction between S.L.Poddar & Co. and N.K.Polimers had taken place through the appellant. From the seized material Annexure-A Exhibit-1 page no.3 & 4, entries are very clear that the loan was granted @1% and the appellant was beneficiary of interest rate difference of 0.5% and 0.10% of brokerage. The same fact was accepted by the appellant during the search proceedings u/s132(4) of the I.T.Act, 1961. The relevant part of the statement of the appellant is as under:

During the course of appellate proceedings, the appellant has also submitted the confirmation by N.K.Polymers & Additives Mfg. Co. to S.L.Poddar & Company. On perusal of the confirmation, it is clear that S.L. Poddar & Company had given a loan of Rs.1,00,00,000/- to N.K.Polymers & Additives Mfg. Co. This confirms the entry found on Annexure-A Exhibit-1 page no.3 & 4. Second the rate of interest is 12%, which also confirm the genuineness of the entry. The AO had made the addition of unaccounted interest and brokerage only for two month. On the basis of the seized material Annexure-A Exhibit-1 page no.3 & 4, entries are very clear that the loan was granted @1% and the appellant was beneficiary of interest rate difference of 0.5% and 0.10% of brokerage. Further, the contention of the appellant is not acceptable that the brokerage income is recorded in the books of M/s Shreenath Associates as no such evidences were produced to justify the claim by the appellant. On the basis of above discussion, I confirm the addition made by the AO of Rs.1,00,000/- on account of undisclosed interest and Rs.20,000/- on account of undisclosed brokerage. (2) Annexure-A, Exhibit-1, Page. No.- 5: On perusal of the assessment order, it is seen that on this page entries are related to difference of interest earned by the appellant and not offered for taxation. The AO had made an addition of Rs. 1,12,450/- as undisclosed income of the assessee. The AO had clearly mentioned in the assessment order that the contention of the assessee was not acceptable as same was not supported with documentary evidence and the assessee in the statement at Question 45 categorically admitted that transaction mentioned on this page were difference of interest earned by him in business of finance brokerage which was not recorded in the regular books of accounts. Further the assessee had himself offered the same for taxation. Therefore, amount of Rs. 112450/- was undisclosed income of the assessee. During the course of appellate proceedings, the appellant has submitted that Addition of unaccounted receipt of Rs. 112450/- Page no. 5 is available on additional paper book page no.

3. The assessee has already offered this income in surrendered income and included in surrender of Rs. 40,00,000/-. Therefore this should not be added again and addition made by AO deserves to be deleted. Actual working is available on paper book page no. 90 to 94. Conclusion: I have considered the findings of the AO and the reply of the appellant. The contention of the appellant is not acceptable, the appellant had surrendered Rs.40,00,000/- on account of undisclosed brokerage, the transactions on this page are not related to brokerage but the same are the difference of interest earned by the appellant in business of finance brokerage. Moreover these entries had not been included in the calculation of undisclosed brokerage income of the appellant On the basis of above discussion, I confirm the addition made by the AO of Rs.1,12,450/- on account of undisclosed income of the appellant. (3) Annexure-A, Exhibit-1, Page. No.- 12:

On perusal of the assessment order, it is seen that the appellant had not shown the brokerage in his regular books of accounts in respect of entries on this page related to Manoj Kumar Goyal. The AO had made an addition of Rs. 19,125/- as unaccounted income of the assessee. The AO had clearly mentioned in the assessment order that the contention of the assesse was examined and it was found that transaction mentioned on the page no. 12 were partly found recorded in books of accounts. The transaction in name of Shri Ashok Kumar Goyal, K.K. Store, Shri Kishan Kumar Goyal, Smt. Sunita Agarwal was found recorded in the M/s B & S company the prop. Concern of Shri Umesh Kumar Saboo HUF. However, transaction in the name of Shri Manoj Kumar Goyal not found recorded in any books of the assessee. Hence brokerage on the transaction in the name of Shri Manoj Kumar Goyal to various persons to the extent to Rs. 6375000/- was unaccounted brokerage income of the assessee which computes at Rs. Rs. 19125/- @0.10% per month on unsecured loan which was unaccounted income of the assessee. During the course of appellate proceedings, the appellant has submitted that Addition of unaccounted brokerage income of Rs. 19125/-, Page no. 12 is available on additional paper book page no.

4. This is complete details of loans and advances to Shri Ashok Kumar Goyal to K.K. Store, K.K. Goyal, Manoj Kumar Goyal and Sunita Agarwal. All the transactions are by cross account payee cheques duly verifiable from the parties. Confirmations of the parties are available on additional paper book page no. 5 to 30. You can verify the details from our books of accounts of M/s B.S. & Co. maintained during the regular course. The brokerage @ 0.10 paisa has been received by the assessee and duly accounted for which can be verified from the books of accounts of the assessee. The copy of detailed brokerage account is enclosed herewith for your kind verification. The brokerage amount comes to Rs. 6375/- which is duly accounted for. (Paper book page no. 27 to 30) The learned AO has made the addition of Rs. 19,125/- by assuming that Manoj Kumar Goyal has advanced money to various person where the position is reversed that Shri Manoj Kumar Goyal and his associates has taken loan and brokerage has been received from Shri Manoj Goyal and associates. Therefore the addition of Rs. 19125/-deserves to be deleted. Actual working is available on paper book page no. 90 to 94.

Conclusion: I have considered the findings of the AO and the reply of the appellant. The contention of the appellant is not acceptable, it is very clear from the assessment order that Manoj Kumar Goyal had accepted loan from various parties through the appellant. The appellant had not accounted the brokerage received from Manoj Kumar Goyal. During the appellate proceedings, the appellant had submitted the ledger account in respect of K.K. Store, Kishan Kumar Goyal, Sunita Agarwal and Ashok Kumar Goyal showing the brokerage transactions. Appellant has not submitted any ledger in respect of Manoj Kumar Goyal, which clearly shows that the appellant had not shown the brokerage received from Manoj Kumar Goyal in his regular books of account. On perusal of the ledger account in respect of K.K. Store, Kishan Kumar Goyal, Sunita Agarwal and Ashok Kumar Goyal showing the brokerage transactions, it is noticed that the brokerage was calculated for two months only.

On the basis of above discussion and considering the above ledgers it is clear that the appellant had not shown brokerage received from Manoj Kumar Goyal. Further, the brokerage was shown by the appellant in other cases was for two month only. On the basis of these facts, it is clear that the appellant had received the brokerage in the case of Manoj Kumar Goyal for only two months. Considering the same brokerage on the transaction of Rs.63,75,000/- @0.10 paisa per month for two months workout Rs. 12,750/-. Hence the addition made by the AO is restricted to Rs. 12,750/- instead of addition made by the AO of Rs.19,125/- and appellant gets a relief of Rs.6,375/- (4) Annexure-A, Exhibit-1, Page. No.- 17: On perusal of the assessment order, it is seen that the appellant had not shown the brokerage in his regular books of accounts in respect of entries on this page. The AO had made an addition of Rs.65,000/- as unaccounted income of the assessee. The AO had clearly mentioned in the assessment order that the contention of the assessee was not acceptable as no brokerage was received by the assessee. Farther the assessee has himself offered the brokerage on these transactions which clearly shown that brokerage received on these transactions was not recorded in his regular books of accounts. Hence the brokerage on these transactions come to Rs. 65000/-0.10% per month on unsecured loan which is unaccounted income of the assessee. During the course of appellate proceedings, the appellant has submitted that Addition of unaccounted brokerage income of Rs. 65000/- Page no. 17 is available on additional paper book page no.

by the assessee company and are still due. But the assessee has calculated the brokerage income and offered Rs. 7500+7500+ 15000+ 2500 = 32500/- on this account included in detailed working given by the assessee. Confirmation is available on additional paper book page no. 32 to 33 which has been included in the surrender of Rs. 40 Lakhs. The learned AO did not point out how he has calculated Rs. 65000/- Therefore the addition of Rs. 65000/- deserves to be deleted. Actual working is available on paper book page no. 90 to 94. Conclusion:

I have considered the findings of the AO and the reply of the appellant. The contention of the appellant is not acceptable. On perusal of the Annexure-A Exhibit-1 Page No.17, it is noticed that the following transactions are mentioned on this page and according to confirmation and date mentioned on this page and on the basis of calculation of interest shown on this page period of loan/brokerage has been considered in the table as under:

From To Amount Intt. Return of loan 01.04.2015 P.K. Govind Kripa 7500000.00 - 11/02/2016 Enterprises Colonizers More than 10 Pvt. Ltd. months. 01.04.2015 Vijay Exports Govind Kripa 7500000.00 - 11/02/2016 Colonizers More than 10 Pvt. Ltd. months. 07.04.2014 Deepak Hitech Govind Kripa 1500000.00 1765480 More than 11 Motors Pvt. Ltd. Colonizers @ 12% months. Pvt. Ltd. 10.04.2014 Star Point Charan Singh 2500000.00 291781 More than 11 Constructions Khangarot @12% months Pvt. Ltd.

On perusal of the above table, it is clear that in all the above cases loan was given through the appellant and appellant had received the brokerage on above transactions at least for 10 months. The appellant has calculated the brokerage income for one month ant the AO had calculated the brokerage for two months on the transaction of Rs.3,25,00,000/-, On the basis of above facts and evidences, it is clear that brokerage was received on above transactions for at least 10 months. Hence the brokerage on total amount of Rs.3,25,00,000 @ 0.10% per month for 10 months works out Rs.3,25,000/-, hence the addition made by the AO of Rs.65,000/- is enhanced to Rs.3,25,000/- as no such brokerage had been shown by the appellant in his regular books of account .

(5) Annexure-A, Exhibit-1, Page. No.- 19: On perusal of the assessment order, it is seen that the AO had made an addition of Rs.27,64,438/- as unexplained income on the basis of the entries on this page. The AO had clearly mentioned in the assessment order that the contention of the assessee was not acceptable as on perusal of ledger account of Shri Dharmendra Agarwal in the books of Bee Ess Financial Service Pvt. Ltd. it was noticed the amount of Rs. 25,00,000/- was returned back to the Shri Dharmendra Agarwal on 16-03-2016 itself whereas in the page it had been mentioned the cash of Rs. 26,59,640/- was paid on 18-04-2016. Hence explanation furnished by the assessee not acceptable. Therefore, amount of Rs. 2764438/- was considered unexplained income in the hand of the assessee. During the course of appellate proceedings, the appellant has submitted that Addition of unaccounted receipts of Rs. 2764438/-, Page no. 19 is available on additional paper book page no.

20. Page no. 20 is available on additional paper book page no.

37. The brokerage has been received by the assessee and has been considered in the brokerage income surrendered for the year under consideration on exhibit - 2 page 118 at sr.no. 9 on Prateek Kothari Account. The addition made on the basis of this paper tantamounts as double addition which deserves to be deleted. Actual working is available on paper book page no. 90 to 94. Conclusion: I have considered the findings of the AO and the reply of the appellant. The contention of the appellant is acceptable that the brokerage has been considered in the brokerage income surrendered for the year under consideration on exhibit - 2 page 118 at sr.no. 9 on Prateek Kothari Account. As the calculation of brokerage income and undisclosed income of brokerage has been considered at other place of the assessment order and the above transaction has been covered there, hence the same addition made here is deleted. On the basis of above discussion, I delete the addition made by the AO of Rs.40,000/- on account of undisclosed income of the appellant. The appellant gets a relief of Rs.40,000/-, (7) Annexure-A, Exhibit-1, Page. No.- 24: On perusal of the assessment order, it is seen that the AO had made an addition of Rs. 20,00,000/-as unaccounted income of the assessee on the basis of the entries on this page. The AO had clearly mentioned in the assessment order that the contention of the assessee was not acceptable as same was not supported with documentary evidence and the assessee in the statement at Question 45 categorically admitted that details on this page had been written with the signature of his employee Shri Rohit Singh and as per information the assessee had receipt cash of Rs. 20,00,000/-from his office in the name of N. Agarwal which was not recorded in books of accounts. Hence the amount of Rs.20,00,000/- remain unexplained in the hand of the assessee and same is considered as a unaccounted income of the assessee. During the course of appellate proceedings, the appellant has submitted that the learned AO has made the addition of Rs. 20 Lakhs on the basis of loose paper. The amount of Rs. 20000/- is mentioned and name of Shri N. Agarwal is mentioned. This was the rough sheet and no narration or other details are mentioned on this paper. The learned AO has assumed this as income of Rs. 20 Lakhs. No any enquiry was made. No any statement or other evidences was brought on record for making addition on this account. Maximum an addition of Rs. 20,000/- can be made on this account and the addition of Rs. 20,00,000/- deserves to be deleted as the learned AO has not substantiated that how this amount of Rs. 20000/- can be treated as Rs. 20 Lakhs without decoding the modus operandi or any instance for making entries by suppressing two zeros. Page no. 24 is available on additional paper book page no.

On perusal of the assessment order, it is seen that the AO had made an addition of Rs. 10,00,000/- as unaccounted income of the assessee on the basis of the entries on this page. The AO had clearly mentioned in the assessment order that the contention of the assessee was not acceptable as same was not supported with documentary evidence and the assessee in the statement at Question 45 categorically admitted not recorded in books of accounts. Hence the transaction mentioned on the page is that he given Rs. 10,00,000/- in cash in the office in the name of Shreeji which was Rs. 10,00,000/-which was unaccounted income of the assessee. During the course of appellate proceedings, the appellant has submitted that the learned AO has made the addition of Rs. 10 Lakhs on the basis of loose paper. The amount of Rs. 10000/- is mentioned and name of Shreeji is mentioned. This was the rough sheet and no narration or other details are mentioned on this paper. The learned AO has assumed this as income of Rs. 10 Lakhs. No any enquiry was made. No any statement or other evidences was brought on record for making addition on this account. Maximum an addition of Rs. 10,000/- can be made on this account and the addition of Rs. 10,00,000/- deserves to be deleted as the learned AO has not substantiated that how this amount of Rs. 10000/- can be treated as Rs. 10 Lakhs without decoding the modus operandi or any instance for making entries by suppressing two zeros. Page no. 27 is available on additional paper book page no.

On perusal of the assessment order, it is seen that the AO had made an addition of Rs. 1,05,000/- as unaccounted income of the assessee on the basis of the entries on this page. The AO had clearly mentioned in the assessment order that the contention of the assessee was not acceptable as same was not supported with documentary evidence and the assessee in the statement at Question 45 categorically admitted that brokerage on these unsecured loans was not recorded in the regular books of accounts. Hence the brokerage on these transactions come to Rs. 105000/- @0.10 % per month on unsecured loan which is unaccounted income of the assessee. During the course of appellate proceedings, the appellant has submitted that Addition of unaccounted brokerage income of Rs. 105000/- on this basis of this paper. This paper Page no. 28 is available on additional paper book page no.

The entries on the upper side of the above paper are as under:-

Cash Rec. 50.00 17/5 14500=00 Meheshwarn 16/5 75000=00 20.00 “ Star TRI Mah 0.50 “ 25 20 30 34.00 20/5 25000=00 Nightward 5.00 21/5 20000=00 -do 30.00 “ 30000=000 -do 141.50 164500=00 -164.50 23.00 Lene

On perusal of the entries on the right side of the page, it is clear that the appellant had given an amount of Rs. 1,64,50,000/- in cash. Further as per the entries at left side of the above page an amount of Rs. 1,41,50,000/- had been received back by the appellant and remaining Rs.23,00,000/- was pending to be received. All facts are clear from the description of the above paper that the all transactions had taken place in cash and the same was also accepted by the appellant in his statements u/s132(4) of the I.T.Act, 1961 taken during the search proceedings. On the basis of above discussion and facts of the case, I uphold the addition made by the AO of Rs. 1,64,50,000/- as undisclosed income of the appellant. 5.3 On the basis of above discussion, the final figures of additions against all the objections raised by the appellant and discussed in the above paras of the order are as under: Page Addition made Decision: Relief or Increase Remarks No. by the AO Addition confirmed/deleted/r educed/enhance 3 120000 Confirmed - - 5 112450 Confirmed - - 12 19125 Reduced (-)6375 The addition made by the AO is restricted to Rs. 12,750/- instead of addition made by the AO of Rs. 19,125 and appellant gets a relief of Rs. 6,375/- 17 65000 Enhanced (+) 260000 The addition made by the AO of Rs. 65,000/- is enhenaced to Rs. 3,25,000/- 19 27644380 Confirmed - - 20 40000 Deleted (-)40000 - 24 2000000 Confirmed - - 26 6500000 Confirmed - - 27 1000000 Confirmed - - 28 105000 Deleted (-) 105000 - 29 347148 Deleted (-) 347148 - 37 1,64,50,000 Confirmed - -

On the basis of above details, the appellant gets a relief of Rs.4,98,523/- (6375 + 40000 + 105000 + 347148) and addition enhanced by Rs.2,60,000/-. Thus, out of total addition made by AO of Rs. 2,95,23,161/-, the addition of Rs. 2,90,24,638/-is hereby confirmed and the addition enhanced by Rs.2,60,000/-. Hence, the total additions of Rs.2,92,84,638/- (29024638 + 260000) are hereby confirmed.”

“1. Facts of the case: -

A search action u/s 132 of the IT Act was conducted at the business premises of the assessee at 310,RatnaSagar, MSB ka Rasta, Johari Bazar, Jaipur where some loose papers were found and seized in which transactions regarding loans and brokerage income earned were noted. These transactions were duly recorded in the regular books of accounts of the assessee. The assesssee submitted detailed reply explaining each entry noted in these papers with reference to his books of accounts. But the learned AO has not considered the reply submitted by the assessee. He only considered the part submission. During the assessment proceedings the learned AO has issued a show cause notice to assessee for calling explanation regarding entries recorded in annexure –A exhibit -1 to exhibit-5, exhibit-14 and exhibit 16. These papers were contain loan transaction and brokerage income. The summary of which is in para 6 of assessment order on page 2 to 6 where a total of Rs. 29,59,57,560/- was made by the learned AO. The learned AO has made the addition of Rs. 2,95,23,161/- (Rs. 1,23,76,888/- on account of unaccounted receipt and income, and Rs. 1,71,46,273/- on account of unaccounted brokerage and interest income) by calculating the brokerage @ 1.20 per annum by assuming that the assessee has received brokerage for the whole year as per noting on various pages of annexure exhibit 1 to 5. The department has issued a show cause notice dated 04.09.2018 in which it was alleged that the assessee has not accounted for total brokerage income on all loan transactions of Rs. 124745.07 Lakhs noted in the seized documents. The assessee has submitted the detailed reply and demonstrate that the transactions recorded in the above seized documents are duly considered and the brokerage received on above transactions has been duly recorded in the books of the assessee in following three concerns: -

(i) Shreenath Associates (ii) B.S. & Co. Prop. UmeshSaboo HUF (iii) Vihan Associates Prop. Shri Giriraj Prasad Saboo

The assessee also submits that –

(i) There are number of entries which are repeated entries and department has considered them two times or three times whereas they are same transactions and recorded on different- different annexures as in month wise details, also on due date wise separate sheets are prepared every month. Some of the entries are appearing in all the documents. (ii) Separate sheets are prepared for the purpose of control, issuing brokerage bill, recoveries and payment of service tax so one transaction is appearing in about four different-different annexures and considered by the learned AO separately for each annexure.

Therefore the assessee submits reconciliation statement as annexure ‘A’ with supporting documents and evidences. The learned AO reproduced the reply of the assessee from page 11 to 16. The learned AO considered the brokerage rate @ 0.10% per month for all twelve months whereas some of the transactions are only for two months but the learned AO did not consider the various reply and reconciliation statement filed by the assesse and made the huge additions. Now the addition wise submission according to seized documents are as under: - (i) Page No. 3 (Annexure–A, Exhibit–1) – Addition of unaccounted brokerage income and interest income of Rs. 120000/-. Page no. 3 is available on paper book page no.

proposal of the lender which has not been materialized and amount has been returned. Therefore this addition deserves to be deleted. Actual working is available on paper book page no. 96 to 100.

(ii) Page no. 5(Annexure–A, Exhibit–1) – Addition of unaccounted receipt of Rs. 112450/-is based on Page no. 5 , which is available on paper book page no. 39. The assessee has already offered this income in surrendered income and included in surrender of Rs. 40,00,000/-. Therefore this should not be added again and addition made by AO deserves to be deleted. Actual working is available on paper book page no. 96 to 100.

(iii) Page no. 12(Annexure–A, Exhibit–1) – Addition of unaccounted brokerage income of Rs. 19125/-. Page no. 12 is available on paper book page no.

(iv) Page no. 17(Annexure–A, Exhibit–1) – Addition of unaccounted brokerage income of Rs. 65000/-. Page no. 17 is available on paper book page no.

(v) Page no. 19(Annexure–A, Exhibit–1) – Addition of unaccounted receipts of Rs. 2764438/-. Page no. 19 is available on paper book page no.

(vi) Page no. 20(Annexure–A, Exhibit–1) – Addition of unaccounted brokerage income of Rs. 40000/- on the basis of page no.

(vii) Page no. 24(Annexure–A, Exhibit–1) – The learned AO has made the addition of Rs. 20 Lakhs on the basis of loose paper. The amount of Rs. 20000/- is mentioned and name of Shri N. Agarwal is mentioned. This was the rough sheet and no narration or other details are mentioned on this paper. The learned AO has assumed this as income of Rs. 20 Lakhs. No any enquiry was made. No any statement or other evidences was brought on record for making addition on this account. Maximum an addition of Rs. 20,000/- can be made on this account and the addition of Rs. 20,00,000/- deserves to be deleted as the learned AO has not substantiated that how this amount of Rs. 20000/- can be treated as Rs. 20 Lakhs without decoding the modus operandi or any instance for making entries by suppressing two zeros. Page no. 24 is available on paper book page no.

(viii) Page no. 26(Annexure–A, Exhibit–1) – Addition of unaccounted receipt of Rs. 6500000/-Page no. 26 is available on paper book page no.

(ix) Page no. 27(Annexure–A, Exhibit–1) –The learned AO has made the addition of Rs. 10 Lakhs on the basis of loose paper. The amount of Rs. 10000/- is mentioned and name of Shreeji is mentioned. This was the rough sheet and no narration or other details are mentioned on this paper. The learned AO has assumed this as income of Rs. 10 Lakhs. No any enquiry was made. No any statement or other evidences was brought on record for making addition on this account. Maximum an addition of Rs. 10,000/- can be made on this account and the addition of Rs. 10,00,000/- deserves to be deleted as the learned AO has not substantiated that how this amount of Rs. 10000/- can be treated as Rs. 10 Lakhs without decoding the modus operandi or any instance for making entries by suppressing two zeros. Page no. 27 is available on paper book page no.

(x) Page no. 28 (Annexure–A, Exhibit–1) – Addition of unaccounted brokerage income of Rs. 105000/- on this basis of this paper. This paper Page no. 28 is available on paper book page no.

(xi) Page no. 29 (Annexure–A, Exhibit–1) – Addition of unaccounted brokerage income of Rs. 347148/-. On the basis of Page no. 29 which is available on paper book page no.

(xii) Page no. 37 (Annexure–A, Exhibit–1) – Addition of unaccounted brokerage income of Rs. 16450000/-. Page no. 37 is available on paper book page no.

The lower authority has also not appreciated the fact that the transaction were recorded in the books of the three concerns of the assessee namely (i) Shree Nath Associates (ii) B. S. & Co. Prop.

Umesh Saboo HUF (iii) Vihan Associates Prop. Shri Giriraj Prasad Saboo. In that reply by the assessee it was contended that there are number of entries which are repeated and thereby considered twice or thrice of the same amount of loan based on the control sheet maintained by the assessee for the difference purpose such issuing brokerage bill, recoveries and payment of service tax and dates showing acceptance and repayment of loans. The reconciliation chart was thus prepared and kept on record, but all these aspects were not considered and thereby the addition was made and sustained by the ld. CIT(A) without appreciating those facts as contended.

“Sub:- Appeal before Hon'ble ITAT, Jaipur in (A.Y. 2017-18) in the case of Umesh Saboo, Jaipur (ADGPS6659C)- regarding Respected Mam, Kindly refer to your letter vide No. CIT (DR-II)/ITAT/JPR/2025-26/289 dated 28.05.2025. In reference to the above point wise comments are being submitted as bellow:- 3. List (attached as Annexure- A) of material seized during the course of search and seizure action carried out on 28.07.20216 on Chand Prakash Agrawal group of which the assessee was one the parties who were covered u/s 132 of the act.

4. Contention of assessee that additions of Rs. 2,95,23.161/- and Rs. 52,42,800/- are explained and recorded in the books of account is not found tenable, comments on these issues are as under.- 1. Comments/Report on addition of Rs. 2,95,23,161/- on account of unaccounted brokerage income: During the search action conducted at 310, Ratna Sagar, MSB ka Rasta, Johari Bazar, Jaipur various incriminating documents were found, seized and inventoried as Annexure-A. In Exhibit-1 to Exhibit-4, Exhibit-14 and Exhibit-16 various pages contains the details of loan transaction and brokerage income earned thereon. It is also pertinent to mention here that following conclusions were also drawn from the statements recorded u/s 132(4) of the assessee during the search & seizure action:- (iv) Figures written are in lakhs of rupees and loan has been provided for minimum 2 months. Sub:- Appeal before Hon'ble ITAT, Jaipur in (A.Y. 2017-18) in the case of Umesh Saboo, Jaipur (ADGPS66590)- regarding.

Respected Mam. Kindly refer to your letter vide No. CIT (DR-II)/ITAT/JPR/2025-26/289 dated 28.05.2025, In reference to the above point wise comments are being submitted as bellow:- 3. List (attached as Annexure- A) of material seized during the course of search and seizure action carried out on 28.07.20216 on Chand Prakash Agrawal group of which the assessee was one the parties who were covered u/s 132 of the act.

4. Contention of assessee that additions of Rs. 2,95,23.161/- and Rs. 52,42,800/- are explained and recorded in the books of account is not found tenable, comments on these issues are as under- 1. Comments/Report on addition of Rs. 2,95,23,161/- on account of unaccounted brokerage income: During the search action conducted at 310, Ratna Sagar, MSB ka Rasta, Johari Bazar. Jaipur various incriminating documents were found, seized and inventoried as Annexure-A. In Exhibit-1 to Exhibit-4, Exhibit-14 and Exhibit-16 various pages contains the details of loan transaction and brokerage income earned thereon. It is also pertinent to mention here that following conclusions were also drawn from the statements recorded u/s 132(4) of the assessee during the search & seizure action:- (iv) Figures written are in lakhs of rupees and loan has been provided for minimunt 2 months. (v) Commission was fixed @0.10% and difference between the fixed interest rate and the actual interest rate received. (vi) Commission/brokerage income earned is not recorded in the regular hooks of account of the assessee. During the assessment proceedings assessee submitted that brokerage rate in the market 70.10% between unknown parties and @0.5% in known parties, contention of the assessee was accepted by the assessing officer in this regard. Further, it is also notable that in those cases where period of loan has not been mentioned, period of 12 months was taken for computation of unaccounted brokerage As per the above discussion, page wise description of transactions and calculations of unaccounted brokerage income was worked out and summarized in assessment order passed by the AO. Accordingly, total addition of Rs. 2.95.23,161/- was made by the assessing officer. It is also notable here that brokerage/commission income was not calculated on the transactions which were fully or partly recorded in the books of account of the assessee. Therefore, contention of the assessee that above addition is explained and recorded in the books of account is not found tenable/22 11. Comments/Report on addition of Rs. 52,42,800/- on account of undisclosed brokerage income: During the assessment proceedings the assessee submitted that in Exhibits 2, 3, 4, 5, 14 & 16, some of entries are declared and duly accounted for in regular books of accounts in various concern of the assessee namely Vihan, B & S Company, Shrinath Associates, Bee Ess Financial Services Pvt. Ltd. The assesssee also submitted that number of entries is repetitive. The assessee also furnishes the details Exhibit wise bifurcating the transaction under three difference head.

1. Transaction which are recorded in books of account.

3. Transaction on which brokerage not received. After considering the reply of the assessee and perusal of the submission along with seized documents on the test check basis, the transactions are categorized under three differem heads namely duplicate transaction, recorded transaction in books of accounts and the transaction on which brokerage has not been accounted for in regular books of accounts and the total unaccounted brokerage on these transaction is derived @ 0.10 paisa per hundred per month and total addition of Rs. 52,42,800/- was made. From the above discussion it is clear that unaccounted brokerage income is calculated only on those transactions which are not recorded in the books of accounts, hence contention of the assessee that above addition is explained and recorded in the books of account is not found tenable. 4.1 Addition wise comments on paper hook submitted as Annexure-A and Annexure-B are as under:- i. Page no. 3(Annexure-A, Exhibit-1):- As per the paper book submitted assessee claimed that he had not charged difference of interest from the party N.K. Polymers. Although, the assessee has already admitted in his statements recorded u/s 132(4) that he keeps the difference between the actually received interest and the interest paid as a brokerage. Further, he failed in submit any documentary evidence in support to the contention made. Therefore, contention of the assessee is not found tenable on this ground. ii. Page no. 5 (Annexure-A, Exhibit-1):- This income cannot be considered as part of the undisclosed income of Rs. 40,00,000/- which was declared during the search and seizure action by the assessee as the above declared income has already been deducted from the undisclosed brokerage income of Rs. 92.42.800/- which was discussed in Para 6.2.4 of the assessment order and total addition of Rs. 52,42,800/- was made. Therefore, contention of the assessee is not found tenable on this ground. Page no. 12 (Annexure-A, Exhibit-1):- On verification of the books of account during the assessment proceedings it has been found that transactions mentioned on the page no. 12 is partly found recorded in books of accounts. The transaction in name of Shri Ashok Kumar Goyal, K.K. Store, Shri Kishan Kumar Goyal. Smt. Sunita Agarwal was found recorded in the M/s B & S company the prop. Concern of Shri Umesh Kumar Saboo HUF. However. transaction in the name of Shri Manoj Kumar Goyal not found recorded in any books of the assessee. Hence brokerage on the transaction in the name of Shri Manoj Kumar Goyal to various persons to the extent to Rs. 6375000/- is unaccounted brokerage income of the assessee which computes at Rs. Rs. 19125/.

@0.10% per month on unsecured loan which is unaccounted income of the assessee. The assessee claimed that brokerage received from Sh. Manoj Kumar Goyal is recorded in the books of account but the claim of the assessee could not be verified from the paper books submitted. Therefore, contention of the assessee is not found tenable on this ground. iv. Page no. 17 (Annexure-A, Exhibit-1):- This income cannot be considered as part of the undisclosed income of Rs. 40,00,000/- which was declared during the search and seizure action by the assessee as the above declared income has already been deducted from the undisclosed brokerage income of Rs. 92.42.800/- which was discussed in Para 6.2.4 of the assessment order and total addition of Rs. 52,42,800/- was made. Further, the assessce has some confusion about the calculation of the unaccounted brokerage income, in fact he is calculating unaccounted brokerage income against the recorded transaction only for one month instead of two months. Therefore, contention of the assessee is not found tenable on this ground. The contention of the assessee is not acceptable on this ground as during assessment proceedings ledger account of Shri Dharmendra Agarwal in the books of Bee Ess Financial Service Pvt. Ltd, were carefully examined by the AO and it is noticed the amount of Rs. 25.00.000/- was returned hack to the Shri Dharmendra Agarwal on 16- 03-2016 itself whereas in the page it has been mentioned the cash of Rs. 26,59,640/- was paid on 18-04-2016, Further, the assessee failed in submits any documentary evidences in support of his claim. Therefore, amount of Rs. 2764438/- is considered unexplained income in the hand of the assessee. vi. Page no. 20 (Annexure-A, Exhibit-1):- This income cannot be considered as part of the undisclosed income of Rs. 40,00,000/- which was declared during the search and seizure action by the assessee as the above declared income has already been deducted from the undisclosed brokerage income of Rs. 92.42.800/-which was discussed in Para 6.2.4 of the assessment order and total addition of Rs. 52,42,800/- was made. vii. Page no. 24 (Annexure-A, Exhibit-1):- The contention of the assessee is not acceptable as the same is not supported with documentary evidence and the assessee in his statements taken u/s 132(4) of the Act at Question 45 categorically admitted that details on this page has been written with the signature of his employee Shri Rohit Singh and as per information the assessee has receipt cash of Rs. 20,00,000/- in the name of N. Agarwal which is not recorded in books of accounts. Hence the amount of Rs. 20,00,000/- remain unexplained in the hand of the assessee and same is considered as a unaccounted income of the assessee. viii. Page no. 26 (Annexure-A, Exhibit-1):- The contention of the assessee is not acceptable as the assessee in the statement at question no. 45 admitted that this is details of Rs. 65 lakh. Since assessee failed to verify these transactions with documentary evidence. Hence the amount of Rs. 65 lakh remains unexplained in the hand of the assessee and same is considered as unaccounted income of the assessee by the assessing officer. In paper book produced by the assessee before the Hon'ble ITAT, calculation of uncounted brokerage income was produced by the assessee however the same has no basis or without documentary evidences ix. Page no. 27 (Annexure-A, Exhibit-1):- The contention of the assessee is not acceptable as same is not supported with documentary evidence during the assessment proceedings and the assessee in the statement at Question 45 categorically admitted that he given Rs. 10,00,000/- in cash in the office in the name of Shreeji which is not recorded in books of sccounts. Hence the transaction mentioned on the page is Rs. 10,00,000/- which is unaccounted income of the assessed. In paper book produced by the assessee before the Hon'ble ITAT, calculation of uncounted brokerage income was produced by the assessee however the same has no basis or without documentary evidences. x. Page no. 28 (Annexure-A, Exhibit-1):- The contention of the assessee is not acceptable as same is not supported with documentary evidence and the assessee in the statement at Question 45 categorically admitted that brokerage on these unsecured loan is not recorded in the regular books of accounts. Hence the brokerage on these transaction come to Rs. 105000/-@ 0.10% per month on unsecured loan which is unaccounted income of the assessee. In paper book produced by the assessee before the Hon'ble ITAT. calculation of uncounted brokerage income was produced by the assessee however the same has no basis or without documentary evidences. xi. Page no. 29 (Annexure-A, Exhibit-1):- The contention of the assessee is not acceptable as same is not supported with documentary evidence and the assessee in the statement at Question 45 categorically admitted that these details pertain to the loans provide to Shri Prateek Kothari from various parties and brokerage earned on these transaction is not recorded in books of accounts. Hence the brokerage on these transaction which computes at Rs. 347148/-@ 0.10% per month on unsecured loan which is unaccounted income of the assessee. Further, this income cannot be considered as part of the undisclosed income of Rs. 40,00,000/- which was declared during the search and seizure action by the assessee as the above declared income has already been deducted from the undisclosed brokerage income of Rs. 92,42,800/- which was discussed in Para 6.2.4 of the assessment order and total addition of Rs. 52,42,800/- was made. xii. Page no. 37 (Annexure-A, Exhibit-1):- The contention of the assessee is not acceptable as same is not supported with documentary evidence and the assessee in the statement at Question 45 categorically admitted that details mentioned on page 37 is not recorded in his books of accounts he also admitted that entry of Rs. 14,50,000/- dated 16-05- 2016 in the name of Maheshwari and Rs. 50,00,000/- dated 17-05-2016 are cash entry both are not recorded in the books of accounts. Hence it is evident that it is unaccounted brokerage income of the assessee amounting to Rs. 1,64,50,000/-. In paper book produced by the assessee before the Hon'ble ITAT, only calculation of uncounted brokerage income was produced by the assessee however the same has no basis or without documentary evidences. xiii. Addition made of Rs. 2,65,025/- on account of unexplained cash seized:-During the search action unexplained cash of Rs. 2,65,025/- was seized, During assessment proceedings the assessee submitted that the amount of Rs. 2,65,025/-has been included in the amount of Rs. 1.50 cores surrendered by the assessee during the course of search'.. However, the same found acceptable as the assessee surrendered Rs. 40,00,000/- during AY 2017-18 and this amount cannot be considered as part of the undisclosed income of Rs. 40,00,000/-which was declared during the search and seizure action by the assessee as the above declared income has already been deducted from the undisclosed brokerage income of Rs. 92,42,800/- which was discussed in Para 6.2.4 of the assessment order and total addition of Rs. 52,42,800/- was made xiv. Addition made of Rs. 7,63,278/- on account of unexplained diamond jewellery seized:- During the assessment same submission of the assessee were duly considered and found that the Smt. Shalu Maheshwari wife of the assessee has shown value of the diamond in the Wealth Tax Return at Rs. 580802/- for AY 2015-16. However, during the course of search on physical verification the diamond of Rs. 1344080/- was valued by registered valuer. Hence the excess of Rs. 763278/-on account of diamond remained unexplained, Further, the CBDT instruction no. 1916 dated 11-05-1994 only speaks about the gold jewellery in possession of the assessee but there is no mention of diamond/precious stones in the whole Instruction. Considering the above details it is clear that excess diamond/precious stones of Rs. 763278/- was found in possession of Shri Umesh Saboo and Smt. Shalu Maheshwari. The addition of Rs. 763278/-was correctly made in the hands of Shri Umesh Kumar Saboo. Hence. contentions of the assessee on this ground is not found tenable. Report is submitted for your kind perusal.”

While confirming this addition the ld. CIT(A) has given his finding vide para 5.2 and thereby finally tabulated the addition deleted, sustained and enhanced by him at para 5.3 page 22 onwards in his order. Record reveals that ld. AO made the addition of Rs. 2,95,23,161/- out of that ld. CIT(A) has sustained the addition of Rs. 2,90,24,638/- and has enhanced the addition by Rs.

2,60,000/-. The assessee disputed the enhancement of the addition and the sustained addition as tabulated vide para 5.3 of the order of the ld. CIT(A).

Having noted that facts of the matter now we deal with each addition that has been disputed one by one. The first addition made by the ld. AO and sustained by the ld. CIT(A) is that of Rs.

1,20,000/-. That addition is made based on the page 3 of Annexure A, Exhibit 1of the seized material. As is available on record that the assessee explain that the first entry on top of left is loan given by M/s. S. L. Poddar and Company to M/s. N. K. Polymers and Additives Manufacturing Company for Rs. 1 Cr. The rate of interest instead 0.50 to .060 percentage was asked more and the finally rate was agreed to 1.2 %. It is already on record that the transaction were recorded in the books of account and confirmation of the parties were filed and the same were not disputed by the revenue. The ld. AO and that of the ld. CIT(A) noted that the transaction were done through the assessee and the assessee was beneficiary for 0.50 % interest beneficiary and 0.10 of brokerage. Since that fact were accepted by the assessee in the statement recorded u/s. 132(4) the addition of Rs. 1,00,000/- as interest and Rs. 20,000/- was added as brokerage. Records reveals and it is not in dispute that whatever regular brokerage income that grows to the assessee on this transaction has already been recorded in the books of M/s. Shreenath Associates. Thus, when all the transaction of loan of Rs. 1 Cr. recorded we do not find any reason to sustain the addition merely based on the statement u/s. 132(4) of the Act. Because a person lending 1 Cr and accepting 1 Cr. paying brokerage why he indulged paying out of books interest and brokerage, even the brokerage is already recorded. This fact has not been contradicted by the revenue and therefore merely on this assumption of having paid that interest of Rs. 1,20,000/- is directed to be deleted.

The second disputed addition is for Rs. 1,12,450/- considering it to be unaccounted receipt of the assessee in the form of unaccounted interest arising from the page no. 5 of Annexure A, Exhibit -1. As explained by the assessee this paper [ paper book page 39 ] contains the details of amount collectible from various parties. The addition for that amount was sustained because the assessee has not disclosed the additional interest received as recorded in this page for an amount of Rs. 1,12,450/-.

The contention of the assessee that the said amount is part of Rs. 40 lac disclosed as unrecorded brokerage income. The ld. CIT(A) confirmed the addition holding that the assessee disclosed brokerage income and the amount as stated is the additional interest and the ld. CIT(A) also noted that the assessee has not included this amount while computing the undisclosed brokerage income.

Record reveals that before the ld. CIT(A) the assessee submitted as unde :[ page 8 of order of ld. CIT(A) ] & 1271/JPR/2024 Umesh Saboo, Jaipur “The assessee ha already offered this income in surrendered income and included in surrender of Rs. 40,00,000/-. Therefore, this should not be added again and addition made by the AO deserve to be deleted.”

The bench noted even though the assessee has given the working the ld. CIT(A) has confirmed the addition merely on the fact that the assessee has disclosed additional income as brokerage and not interest therefore, he has confirmed the addition but he has not disputed the fact that the assessee has placed on record the working of the additional income offered and since the same is not disputed the income which is offered in the undisclosed income as worked out for an amount of Rs. 40,00,000/- the same amount again for an amount of Rs. 1,12,450/- cannot be added separately to the income of the assessee and thereby the same is directed to be deleted.

The next disputed addition is for an amount of Rs. 12,750/- which was sustained by the ld. CIT(A) as against the addition made for an amount of Rs. 19,125/- by the ld. AO. The disputed addition is based on the page no. 12 of Annexure – A, Exhibit -1.

The bench noted that the transaction of loan recorded on this page are by an account payee cheque. The assessee has already demonstrated before the ld. CIT(A) that the brokerage income to & Co. As regards the balance amount the ld. AR of the assessee submitted that the addition was sustained considering that Shri Manoj Kumar Goyal has advanced money to various person where the situation was different as to Shri Manoj Kumar Goyal and his associates has taken loan and brokerage has been received. This fact has been stated by the assessee to the ld. AO and that of the ld. CIT(A). The ld. CIT(A) has given the part relief based on the facts already stated by the assessee to the ld. AO to the extent of Rs. 6,375/-. As is evident that the addition was sustained as undisclosed brokerage income. Since the assessee has already disclosed Rs. 40,00,000/- as undisclosed brokerage income we do not find any reason to sustain the addition of Rs. 12,750/- and thereby directed to be deleted.

The next dispute relates to the addition of Rs. 65,000/- made by the ld. AO and ultimately enhanced to Rs. 3,25,000/- by the ld.

CIT(A). The ld. CIT(A) made the enhancement without giving any opportunity to the assessee as required. This issue is arising because on page no. 17 of Annexure A, Exhit-1 entries regarding various loan transactions between the parties are recorded. The assessee contended that the ld. AO did not gave any breakup for the brokerage for all the months. He has also not appreciated that the brokerage is already accounted for in B. S. & Co. The ld. CIT(A) has already recorded his finding that the assessee has already offered the brokerage for one month [ last para on page 12 ] but he choose to tax it for 10 month without any reason. Thus, once the brokerage is found to be have been recorded at the time when the loan transaction took place how it is to be taxed for 10 months is not justified whereas the brokerage on this transaction once found to have been recorded there is no justification for making it for another 10 months and that too without giving any opportunity of being heard to the assessee. Considering that aspect of the we direct to delete the addition made by the ld. CIT(A) for an amount of Rs. 3,25,000/-.

Now we deal with the addition which is based on the page no 19 of Annexure – A Exhibit-1. Ld. AO considering the entries recorded in this page made addition of Rs. 27,64,438/- which was confirmed by the ld. CIT(A). The bench noted that the transaction recorded on this page relates to the F. Y. 2015-16 relevant to A .

Y. 2016-17 whereas AO made the addition in 2017-18. The assessee filed confirmation to the fact that the transaction between Ltd., the assessee acted as broker and he has offered the undisclosed brokerage income earned. Considering that aspect of the matter there addition made in the year under consideration deserves to be deleted as there is no role of assessee for undisclosed income or that of assets for that amount.

The next addition disputed relates to page no 24 of Annexure – A, Exhibit – 1. While making the addition ld. AO noted that the details mentioned in this page has been written with the signature of his employee Shri Rohit Singh. Ld. AO noted that as per the information the assessee had received Rs. 20,00,000 from his office in the name of N. Agarwal which was not recorded in the books of accounts of the assessee. Thereby ld. AO made the addition, when the matter taken up before the ld. CIT(A) has confirmed the addition based on the statement and details mentioned in the assessment order. Before us the ld. AR of the assessee submitted that the page 24 is without any head or tail and it is for Rs. 20,000/- and not for Rs. 20,00,000/-. The ld. AO and that of the ld. CIT(A) has not made any enquiries while considering the change in the figure and no supporting evidence was placed on record while making the addition and therefore, the unaccounted income of the assessee. The assessee submitted that without confronting to the assessee as to how the 20,000/- becomes 20,00,000 no addition can be made in the hands of the assessee. The ld. AO and that of ld. CIT(A) has not referred any cogent material showing that is unaccounted income or the investment of the assessee. The assessee is not found have any assets for that amount and merely that loose paper found the addition to the extent of Rs. 20,00,000/- cannot be made in the hands of the assessee. Even otherwise the assessee has already offered undisclosed income and that working made by the assessee has not been disputed by the ld. AO through ld. DR.

Considering that aspect of the matte we see no reason to sustain that addition and thereby we direct to delete the same.

The next addition disputed relates to page no 26 of Annexure – A, Exhibit – 1. While making the addition ld. AO noted that the assessee in the statement recorded at question no. 45 stated that the details relates to Rs. 65 lacs. Since the assessee failed to get verify this transaction the ld. AO treated the said amount as unaccounted income of the assessee. While sustaining the addition ld. CIT(A) noted that the page is clearly shows the reflects the loan amount and interest on the dates of transactions and since the assessee failed to get this verified the ld. CIT(A) has sustained the addition. Before us the ld. AR of the assessee submitted that the transaction is for Rs. 65,000 only and the entries recorded are not interest. He stated that first entry is Rs. 32,620/- then Rs. 35,000/- then Rs. 1208.20. Thus, these entries total come to Rs. 68,828.20, Rs. 65,000/- was paid and thereby the addition cannot be made for Rs. 65,00,000/-. Even otherwise the amount of Rs. 68,828.20 is covered from the amount disclosed by the assessee and therefore, no further addition is required to be made on this issue and thereby directed to be deleted.

The fact of the entry of Rs. 10,000/- recorded at page no 27 of Annexure – A, Exhibit – 1 is similar to the page no 24 of Annexure – A, Exhibit – 1 for which we have given the finding and the facts being similar the same is not repeated. Based on that finding the addition of Rs. 10,00,000/- is also directed to be deleted.

The last disputed addition arises from page no. 37 of Annexure – A, Exhibit -1 for an amount of Rs. 1,64,50,000/- confirmed that addition based on the finding that the assessee has not supported their contention with evidence. Ld. CIT(A) also support the question no. 45 in the statement made u/s. 132(4) of the Act and thereby he sustained the addition. On this issue the ld.

AR of the assessee submitted that the assessee has already included the brokerage income in the undisclosed brokerage income offered. The transaction of loan is duly reflected in the confirmation of account filed on paper book page 92 to 95 filed by the assessee. Thus, it is clear from the submission filed that the assessee has acted as broker to arrange loan for his client and the confirmation to that effect is filed. The assessee has arranged loan on behalf of the following parties;

From To Even the submission of the assessee and as confirmed in the assessment order that the assessee has while calculating the unaccounted brokerage income included the commission on these loan of Rs. 1,64,50,000/-. Thus, once the brokerage income is accepted no separate addition of loan taken placed between two different parties as undisclosed income of the assessee and therefore, we direct to delete the addition of Rs. 1,64,50,000/-.

Based on these observations, ground no. 2 raised by the assessee is allowed.

“7.2 Decision: 7.2.1 On perusal of the assessment order, it is noticed that the AO had made an addition of Rs. 2,65,025/-as undisclosed income of the appellant u/s 68 of the I.T.Act, 1961 and taxed as per provisions of section 115BBE of the I.T.Act, 1961. 7.2.2 The AO had clearly mentioned in the assessment order that during the course of search proceeding at the premises of the assessee cash was found in a 3 different plastic cover alongwith cheque having amount there in Rs. 139025/-, Rs. 18000/-, Rs.

108000/- respectively which total to Rs. 2,65,025/-, On being asked assessee admitted in his statement recorded u/s 132(4) and question no. 42 & 43 that in some of the cases he received the loan at lower interest rate and advance the same at higher rate to other person. The difference of interest rate was his unaccounted income which he received in cash. 7.2.3 The AO had also made the relevant part of the statements of the appellant taken u/s 132(4) of the I.T.Act, 1961 during the search proceedings, as the part of the assessment order. 7.2.4 The AO had also mentioned in the assessment order that during the course of assessment proceedings, the assessee was asked to furnish explanation on the cash amount to the extent to Rs. 2,65,025/-. The assessee in his reply submitted that the amount of Rs. 2,65,025/- had been included in the amount of Rs. 1.50 cores surrendered by the assessee during the course of search, However, the same found acceptable as the assessee surrendered Rs. 40,00,000/- during AY 2017-18 which had already been considered. Therefore, the cash to the extent to Rs. 2,65,025/- was undisclosed income of the assessee which was added back to the total income of the assessee u/s68 of the I.T.Act and taxed as per provisions of section 115BBE of the I.T.Act, 1961. 7.2.5 During the course of appellate proceedings the appellant has given the position of cash balances in respect of various identities and submitted that as per cash book of all the persons and entities the explained cash was 38,07,887/- whereas the total cash found was 45,40,495/-. So the excess cash found was 7,32,608/-. In this regard we would like to submit that the assessee has surrendered 1,10,00,000/- for assessment year 2016-17 and 40,00,000/- for assessment year 2017-18. The excess cash found was part of above surrendered income of Rs. 1,50,00,000/- which has been honoured by the assessee and tax has been paid in respective years. So kindly treat the excess cash found as fully explained on this account. 7.2.6 I have considered the findings of the AO in the assessment order and the reply of the appellant. On the basis of the same, it is very clear that during the course of search proceedings, the appellant had failed to justify the source of cash found of Rs.2,65,025/- and accepted in his statements u/s132(4) of the I.T.Act, 1961 as his unaccounted income which had not been entered in regular books of account Further AO had already allowed the credit of surrendered income of Rs.1,50,00,000/-i.e. Rs.1,10,00,000/- for the A.Y.2016-17 and Rs.40,00,000/- for the A.Y.2017-18 in undisclosed brokerage and other income, hence the AO was justified to make the above addition as undisclosed income of the appellant. On the basis of above discussion, I uphold the addition of Rs.2,65,025/- made by the AO u/s 68 of the I.T.Act, 1961 and taxed as per provisions of section 115BBE of the I.T.Act, 1961.”

Sr.No. Premises Cash found Cash seized 1 310, RatnaSagar, MSB 3824575 2500000 Ka Rasta, Jaipur 2 657, Jai Lal MunshiKa 8850 0 Rasta, Chandpole bazaar, Jaipur 3 146, Rajendra Marg, 662710 600000 Devi Nagar, New Sanganer Road, Jaipur 4 146, Rajendra Marg, 44360 0 Devi Nagar, New Sanganer Road, Jaipur (From kamleshsaboo) Total 4540495 3100000 Ld. AR of the assessee also submitted that as per cash book of all the business firms and individuals as on date of search and as per computer accounts following are the cash balances: - Sr.No. Name of concern Cash balance 1 SHRINATH ASSOCIATES 930227.25 2 BEE ESS FINANCIAL 514579.78 SERVICE P LTD 3 B.S. & COMPANY 528078.00 4 B.S. BUILDHOME PVT LTD 169941.00 5 VIHAN ASSOCIATES 26969.00 6 UMESH SABOO HUF 7630.00 7 UMESH KUMAR SABOO 52622.22 8 SUDHA SABOO 37550.00 9 SHIVANI SABOO 14700.00 10 SHITAL SABOO 273950.00 11 SHALU MAHESHWARI 51568.00 12 MUKESH KUMAR SABOO 207295.00 HUF 13 MUKESH KUMAR SABOO 16000.31 14 KAMLESH SABOO HUF 663925.00 15 KAMLESH SABOO 106951.36 16 HARSHITA MAHESHWARI 35130.00 17 GIRIRAJ PRASAD SABOO 28857.00 18 GIRIRAJ PRASAD SABOO 141913.00 HUF TOTAL 3807886.92 That as per cash book of all the persons and entities the explained cash was Rs. 38,07,887/- whereas the total cash found was 45,40,495/-. So the excess cash found was 7,32,608/-. In this regard we would like to submit that the assessee has surrendered Rs. 1,10,00,000/- for assessment year 2016-17 and Rs. 40,00,000/- for assessment year 2017-18. The excess cash found was part of above surrendered income of Rs. 1,50,00,000/- which has been honoured by the assessee and tax has been paid in respective years. So kindly treat the excess cash found as fully explained on this account.”

20. On the other hand ld. DR heavily relied upon the finding recorded in the order of the ld. CIT(A) and that of the report of the ld. AO. Ld. DR on this issue relied on the following submission:-

“xiii. Addition made of Rs. 2,65,025/- on account of unexplained cash seized:-During the search action unexplained cash of Rs. 2,65.025/- was seized. During assessment proceedings the assessee submitted that the amount of Rs. 2,65,025/- has been included in the amount of Rs. 1.50 cores surrendered by the assessee during the course of search',. However, the same found not acceptable as the assessee surrendered Rs. 40,00,000/- during AY 2017-18 and this amount cannot be considered as part of the undisclosed income of Rs. 40,00,000/-which was declared during the search and seizure action by the assessee as the above declared income has already been deducted from the undisclosed brokerage income of Rs. 92,42,800/- which was discussed in Para 6.2.4 of the assessment order and total addition of Rs. 52.42.800/- was made.”

7.2.2 The AO had clearly mentioned in the assessment order that during the course of search proceeding at the premises of the assessee cash was found in a 3 different plastic cover alongwith cheque having amount there in Rs. 139025/-, Rs. 18000/-, Rs. 108000/- respectively which total to Rs. 2,65,025/-, On being asked assessee admitted in his statement recorded u/s 132(4) and question no. 42 & 43 that in some of the cases he received the loan at lower interest rate and advance the same at higher rate to other person. The difference of interest rate was his unaccounted income which he received in cash.

As is evident from the above finding that the assessee has already explained the source and nature of income and why the same is not considered and the bench note that vide para 7.2.6 the ld. CIT(A) holds a contrary view which reads as under :

7.2.6 I have considered the findings of the AO in the assessment order and the reply of the appellant. On the basis of the same, it is very clear that during the course of search proceedings, the appellant had failed to justify the source of cash found of Rs.2,65,025/- and accepted in his statements u/s132(4) of the I.T.Act, 1961 as his unaccounted income which had not been entered in regular books of account Further AO had already allowed the credit of surrendered income of Rs.1,50,00,000/-i.e. Rs.1,10,00,000/- for the A.Y.2016-17 and Rs.40,00,000/- for the A.Y.2017-18 in undisclosed brokerage and other income, hence the AO was justified to make the above addition as undisclosed income of the appellant.

Looking to the fact which are not disputed that while search cash was found in a 3 different plastic cover along with cheque having amount there in Rs. 139025/-, Rs. 18000/-, Rs. 108000/- respectively which total to Rs. 2,65,025/-, On being asked assessee admitted in his statement recorded u/s 132(4) and question no. 42 & 43 that in some of the cases he received the loan at lower interest rate and advance the same at higher rate to other person. The difference of interest rate was his unaccounted income which he received in cash. Based on these finding we do not see any reason to sustain the separate addition of cash and thereby the same is directed to be deleted.

Based on this observation ground no. 4 raised by the assessee is allowed.

“8.2 Decision: 8.2.1 On perusal of the assessment order, it is noticed that the AO had made an addition of Rs. 7,63,278/- u/s 69 of the Income Tax Act, 1961 on account of jewellery found during the course of search. 8.2.2 The AO had clearly mentioned in the assessment order that during the course of search jewellery was found from various residence premises of the assessee. The detail of which was as below: S. No. Premises Inventory Amount Belong to 1. 310 Ratna Sagar, MSB JF Rs. 72003/- Silver Articles of Shalu JF Ka Rasta, Johari Rs. 72003/- Maheshwari Bazar, jaipur (1.75Kg) 2. 657, Jailalmunshi Ka JF Rs. Gold of Rs. Sadha Rasta, Chandpoal 1006561/- 88625/- Maheshwari Bazar, Jaipur (346.7Gram) Sivler of -do- Rs.116936/- (3.152 Kg) 3. 146, Rajednra marg, JF-1 Rs. Gold of Rs. -do- Devi Nagar, New 3958321/- 2422650/- Sanganer road, jaipur. (997.2 Gram) Silver of Rs. 191591/- (5.136 -do-

Kg) JF-2 Rs. Gold of Rs. Shital 1533365/- 1246220/- ( Maheshwari 527.6 gram) Silver of Rs. -do- 54145/- (1.4 Kg.) Diamond of Rs. -do- 233000/- JF-3 of Rs. Gold of Rs. Narbada 163632/- 102480/- ( 42 Gram) Silver of Rs. -do- 61152/- (1.68 KG)

The AO further mentioned in the assessment order that on being asked to furnish the explanation with source of fund to acquired aforementioned jewellery the assessee stated that jewellery pertaining to Smt. Shalu Maheshwari and Smt. Shital Maheshwari have been shown in the W.T. return filed by them and on the other hand exempt as per CBDT circular dated 11-05-1994. Therefore, no adverse inference was drawn in the case of Smt. Sudha Maheshwari, Smt. Shital Maheshwari and Smt. Narbada. The assessee's claim had been examined and following facts noticed in the case of Smt. Shalu Maheshwari.

Particular of Physically found Show in the W.T. Excess Jewellery return for A.Y. 2015-16 filed on 18.03.2016 Gold Rs. 2422650/- Rs. 1928388/- - (997.2 Gram) (1141.53 gramt) Silver Rs. 263594/- ( Rs. 379803/- (9.87 - 6.886 Kg) Kg) Diamond Rs. 1344080/- Rs/ 580802/- 763278/-

The claim of the assessee duly considered and found that the Smt. Shalu Maheshwari wife of the assessee had shown value of the diamond in the Wealth Tax Return at Rs. 580802/- for AY 2015-16. However, during the course of search on physical verification the diamond of Rs. 1344080/- was valued by registered valuer. Hence the excess of Rs. 763278/- on account of diamond remained unexplained. Further, the CBIT instruction no. 1916 dated 11-05-1994 only speaks about the gold jewellery in possession of the assessee but there is no mention of diamond/precious stones in the whole Instruction.

Considering the above details it was clear that excess diamond/precious stones of Rs. 763278/- was found in possession of Shri Umesh Saboo and Smt. Shalu Maheshwari. Therefore, considering Shri Umesh Saboo as key, person of the family hence excess diamond as stated above. The addition of Rs. 763278/- was made in the hands of Shri Umesh Kumar Saboo u/s 69 of the Act and taxable at the rate of 60% as provided u/s 115BBE. 8.2.3 During the course of appellate proceedings the appellant has submitted as under. (a) That the jewellery found from the 657, Jai Lal Munshi Ka Rasta belongs to Smt. Sudha Saboo Wo Shri Mukesh Saboo brother of the assessee and it was below 500 gram and only 346.700 grams which was her own property. (b) The jewellery found from the possession of Smt. Shalu Maheshwari was duly declared in wealth tax return and copy of wealth tax return and valuation report is enclosed herewith. (Page No. 26 to 31) (c) The jewellery found Smt. Sheetal Saboo was 569.60 grams out of which 42 grams belongs to her mother and balance belongs to her and two unmarried daughter Miss Yagya (12 years) and Miss Annaya (5 years). The silver items of 163632/- belongs to the whole family members and duly declared in the wealth tax return of Smt. Shalu Maheshwari. This fact is mentioned in the statement recorded u/s 132(4) of the IT Act, 1961 in reply to question no. 8 of Smt. Sheetal Saboo. 8.2.4 I have considered the findings of the AO in the assessment order and the reply of the appellant. On perusal of the assessment order, it is clear that the AO had followed the CBDT Instruction No. 1916 and allowed the credit to the appellant accordingly. In this particular case, the AO had made addition of Rs.7,63,278/- on account of excess diamond/precious stones found during the course of search proceedings. In the case of Shalu Maheshwari the value of the diamond in the Wealth Tax Return for the A.Y.2015-16 was shown of Rs.5,80,802/- and as per the physical verification and value by the registered valuer the total value of diamonds were valued to Rs. 13,44,080/- and the appellant has failed to justify the source of these excess diamonds with any documentary evidences. During the course of appellate proceedings, the appellant has not made any submission in respect of this particular issue. In view of the above discussion, I uphold the additions made by the AO, as the AO has followed the CBDT Instruction No. 1916 and various court decisions, where it was held that the possession of the jewellery of the quantities specified in the instruction issued by the CBDT was reasonable and therefore should be held to be explained in the hands of assessee. Accordingly, AO has allowed the credit to the assessee and made addition on the excess diamond/precious stones found during the course of search proceedings as the assessee was unable to substantiate the procurement and source of investment with documentary evidences in excess diamond/precious stones found in his possession. On the basis of above discussion, I uphold the addition of Rs.7,63,278/- made by the AO u/s 69 of the I.T.Act, 1961 and taxed as per provisions of section 115BBE of the I.T.Act, 1961.”

Ground No. 5 – During the course of search the total jewllery found is as under:- S. Premises Value Weight Annexure Possession No. 1 Business premises of Shri 72003 (silver coins JF Duly shown in UmeshSaboo at 310, for laxmipooja given wealth tax return of RatnaSagar, MSB Ka Rasta, by Smt. Smt. Jaipur ShaluMaheshwari) ShaluMaheshwari 2 Residential premises of father 1006561 (346.700 JF This belongs to and brother of Shri gram) Smt. Sudha Saboo UmeshSaboo at 657, Jai Lal W/o Shri Mukesh MunshiKa Rasta, Chandpole Kumar Saboo bazaar, Jaipur brother of the assessee 3 Residence of Shri Umesh 3958321/- JF-1 The jewellery of Saboo at 146, Rajendra Smt. (ShaluMaheshwari) JF-2 Marg, Devi Nagar, New ShaluMaheshwari was duly declared Sanganer Road, Jaipur 1533365/- JF-3 in wealth tax return filed for A.Y. 2015- (Sheetal Saboo 16 and other W/o Shri Kamlesh jewelry found was Saboo) less than 500 gram per female 163632/- member. Total 5655315/- (a) That the jewellery found from the 657, Jai Lal Munshi Ka Rasta belongs to Smt. Sudha Saboo W/o Shri Mukesh Saboo brother of the assessee and it was below 500 gram and only 346.700 grams which was her own property. (b) The jewellery found from the possession of Smt. Shalu Maheshwari was duly declared in wealth tax returns. Copy of wealth tax return and valuation report were filed before the Learned Assessing Officer as well as Learned CIT(A). (c) The jewellery found Smt. Sheetal Saboo was 569.60 grams out of which 42 grams belongs to her mother and balance belongs to her and two unmarried daughter Miss Yagya (12 years) and Miss Annaya (5 years). The silver items of ` 163632/- belongs to the whole family members and duly declared in the wealth tax return of Smt. ShaluMaheshwari. This fact is mentioned in the statement recorded u/s 132(4) of the IT Act, 1961 in reply to question no. 8 of Smt. Sheetal Saboo. In view of the above, the addition made by the ld Assessing Officer deserves to be deleted.

Ld. DR also filed the comments of the ld. AO which reads as under :- xiv. Addition made of Rs. 7,63,278/- on account of unexplained diamond jewellery seized:- During the assessment same submission of the assessee were duly considered and found that the Smt. Shalu Maheshwari wife of the assessee has shown value of the diamond in the Wealth Tax Return at Rs. 580802/- for AY 2015-16. However, during the course of search on physical verification the diamond of Rs. 1344080/- was valued by registered valuer. Hence the excess of Rs. 763278/- on account of diamond remained unexplained. Further, the CBDT instruction no. 1916 dated 11-05-1994 only speaks about the gold jewellery in possession of the assessee but there is no mention of diamond/precious stones in the whole Instruction. Considering the above details it is clear that excess diamond/precious stones of Rs. 763278/- was found in possession of Shri Umesh Saboo and Smt. Shalu Maheshwari. The addition of Rs. 763278/-was correctly made in the hands of Shri Umesh Kumar Saboo. Hence, contentions of the assessee on this ground is not found tenable.

The claim of the assessee duly considered and found that the Smt. Shalu Maheshwari wife of the assessee had shown value of the diamond in the Wealth Tax Return at Rs. 580802/- for AY 2015-16. However, during the course of search on physical verification the diamond of Rs. 1344080/- was valued by registered valuer. Hence the excess of Rs. 763278/- on account of diamond remained unexplained. Further, the CBIT instruction no. 1916 dated 11-05-1994 only speaks about the gold jewellery in possession of the assessee but there is no mention of diamond/precious stones in the whole Instruction. Considering the above details it was clear that excess diamond/precious stones of Rs. 763278/- was found in possession of Shri Umesh Saboo and Smt. Shalu Maheshwari. Therefore, considering Shri Umesh Saboo as key, person of the family hence excess diamond as stated above. The addition of Rs. 763278/- was made in the hands of Shri Umesh Kumar Saboo u/s 69 of the Act and taxable at the rate of 60% as provided u/s 115BBE.

As is evident that the ld. CIT(A) has confirmed the addition only on the ground that the valuation shown in the wealth tax return differs the valuation undertaken by the search team. As the valuation is subjective matter and there is no finding of the lower authority that the weight and the items declared in the wealth tax return are not the same was found. The only difference of the value not matched with the wealth tax return with that of valuation done at the time of search the addition cannot be made in the absence of the finding that the assessee has purchased the diamonds ornaments arguments that merely there exist a difference in the valuation of diamond ornaments no addition can be made and therefore, the same is directed to be deleted. Based on this observation ground no. 5 raised by the assessee is allowed.

In the result, both the appeal filed by the assessee are partly allowed.

Order pronounced in the open Court on 20/08/2025.

Sd/- Sd/- ¼ Mk0 ,l- lhrky{eh ½ ¼ jkBkSM+ deys'k t;UrHkkbZ ½ (Dr. S. Seethalakshmi) (Rathod Kamlesh Jayantbhai) U;kf;d lnL;@Judicial Member ys[kk lnL;@Accountant Member Tk;iqj@Jaipur fnukad@Dated:- 20/08/2025 *Ganesh Kumar, Sr. PS आदेश की प्रतिलिपि अग्रेf’ात@ब्वचल वf जीम वतकमत वितूंतकमक जवरू 1. vihykFkhZ@The Appellant- Umesh Saboo, Jaipur. izR;FkhZ@ The Respondent- DCIT, Central Circle-2, Jaipur.