DCIT, CENTRAL CIRCLE-1, JAIPUR, JAIPUR V. ROYAL DEVELOPERS, JAIPUR

ITA 448/JPR/2025

AI Insights

The case revolves around a search and seizure operation conducted under section 132(1) of the Income Tax Act, 1961, at the premises of the Om Agarwal Group, including the residential premises of Shri Hemant Garg. Subsequent to the search, the Assessing Officer issued a notice under section 153A and made a protective addition of Rs. 3,02,15,165 to the income of M/s Royal Developers, a partnership firm, alleging unaccounted income from cash and cheque loans and interest payments. The CIT(A) later deleted this addition, leading to the revenue's appeal before the Tribunal. The Tribunal found that the additions were based on the personal transactions of the partners, which had already been taxed in their individual capacities, and thus, the protective addition in the hands of the firm was not justified.

• Counselvise Citation: [2025] 140 COUNSELVISE.COM (IT) 779574 (ITAT-JAIPUR)
• Duration Of Justice: 6 month(s) 22 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 15-10-2025
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: B
• Assessment Year: misc
• Appeal Filed On: 23-03-2025
• Laws Referred To: Income Tax Act, 1961
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: ALKA GAUTAM
• Assessee Lawyers: TARUN MITTAL; HARSHIT AGARWAL
• Keywords: Revised return; Unexplained investment; Income from undisclosed sources; Document seized; Documents seized; Search and seizure; Loose papers; Initiation of penalty proceedings
• Section: 142(1); 132; 153A; 69; 139

Judgement Text

" vk;dj vihyh; vf/kdj.k] t;iqj U;k;ihB] t;iqj IN THE INCOME TAX APPELLATE TRIBUNAL, JAIPUR BENCHES,”B” JAIPUR MkWa- ,l-lhrky{eh] U;kf;d lnL; ,oa Jh jkBksM deys'k t;UrHkkbZ] ys[kk lnL; ds le{k BEFORE: DR. S. SEETHALAKSHMI, JM & SHRI RATHOD KAMLESH JAYANTBHAI, AM vk;dj vihy la-@ITA. No. 448/JPR/2025 fu/kZkj.k o\"kZ@Assessment Years : 2015-16 The DCIT, Central Circle-1, Jaipur. cuke Vs. M/s Royal Developers 409-413, 4th Floor, Arkade D-12, Malviya Marg, C-Scheme, Jaipur. LFkk;h ys[kk la-@thvkbZvkj la-@PAN/GIR No.: AARFR5519C vihykFkhZ@Appellant izR;FkhZ@Respondent fu/kZkfjrh dh vksj ls@ Assessee by : Shri Tarun Mittal, C.A. & Shri Harshit Agarwal, C.A. jktLo dh vksj ls@ Revenue by : Mrs Alka Gautam, CIT-DR a lquokbZ dh rkjh[k@ Date of Hearing 24/07/2025 mn?kks\"k.kk dh rkjh[k@Date of Pronouncement : 15/10/2025 vkns'k@ ORDER PER: RATHOD KAMLESH JAYANTBHAI, AM Feeling dissatisfied with finding so recorded in the order of the Commissioner of Income Tax, Appeals-4, Jaipur [ for short CIT(A) ] dated 30.01.2025 the present appeal was filed by the revenue. The dispute relates to the assessment year 2015-16. Ld. CIT(A) passed that order because the assessee challenged the order of assessment of income passed upon them u/s 153A of the Printed from counselvise.com ITA No. 448/JPR/2025 M/S Royal Developers, Jaipur. 2 Income Tax Act, 1961 (for short “Act”) dated 12.05.2021 passed by DCIT, Central Circle-1, Jaipur [ for short AO] before him. 2. The grounds upon which the revenue has challenged that order of the ld. CIT(A) reads as under: - “1. Whether on the facts and in the circumstances of the case and in law, the Ld. CIT(A) is justified in deleting addition of Rs.3,02,15,165/- ignoring the fact that the assessee had made advances from unexplained sources and charged interest thereon ? 2. Whether on the facts and in the circumstances of the case and in law, the Ld. CIT(A) is justified in granting relief to the assessee without deciding the issue on merits ignoring the fact that substantive addition has not been made in the hands of partners of the firm. Thus the addition made in the hands of the assessee on protective basis should remain for the sake of revenue? 3. Whether on the facts and in the circumstances of the case and in law, the Ld. CIT(A) is justified in granting relief to the assessee ignoring the fact that during the course of search & seizure action in the cases of Om Agarwal group, wherein evidence of unaccounted and unexplained receipts and interest were found and the additions were made on the basis of such seized evidences which the assessee failed to explain during the assessment proceedings? 4. The applicant craves leave to add, amend or withdraw any of the ground of appeal during the course of appeal proceedings.” 3. Brief facts of the case are that a search & seizure operation under section 132(1) of the Act was carried out on 16.01.2019 at the various premises of Om Agarwal Group. Consequent to search action, the case of the assessee firm was centralized with the DCIT, Central Circle-1, Jaipur, by the order of the PCIT Central vide dated 31-05-2019. Consequent to the search notice u/s 153A Printed from counselvise.com ITA No. 448/JPR/2025 M/S Royal Developers, Jaipur. 3 of the Act was issued to the assessee Company on 19.03.2020 which was duly served. In response to that notice issued u/s 153A, the assessee firm furnished Return of Income on 20-08-2020 declaring total income at Rs. NIL/-. Earlier the assessee firm had not filed his regular return u/s 139 of the Act. The assessee firm derives income from business or profession during the year under consideration. Notice u/s 143(2) of Act was issued on 21-09-2020 which was duly served. Further notice u/s 142(1) of the Act was issued on 04-02-2021 and certain details/explanations were called for. In response to these notices, the assessee firm submitted requisite details/explanation, which was examined by the ld. AO. Based on those submissions made, details filed ld. AO verified with the seized material and thereby he proceeded to make the addition on the issue as discussed herein after. 3.1 Unaccounted cash loans/receipts and Interest payments: During the search & seizure operation carried out in the group of Om Agarwal, Sawai Madhopur dated on 16.01.2019, residence of Shri Hemant Garg situated at 8, Indra Colony Civil Line Road, Sawai Madhopur was also covered for action u/s 132 of Printed from counselvise.com ITA No. 448/JPR/2025 M/S Royal Developers, Jaipur. 4 the Act. While search proceedings, various incriminating documents were found & seized from the residence of Shri Hemant Garg. Some loose papers were found and seized as exhibit No.4. It has been observed that transactions narrated in this exhibit are related to cash and other advances taken and interest payments by the firm M/s Royal Developers to various persons including Shri Hemant Garg. The handwriting on these pages were of Shri Kapil Jain; accountant of M/s Ranthambhore Regency Hotel. Pages 1 to 8 are related to details of cash and cheque loans and interest payments by M/s Royal Developers for project Chomu House and Royal developers. Ld. AO noticed that M/s Royal Developers is partnerships Firm, situated at Jaipur and Shri Om Prakash Agarwal (Gupta), Shri Rachit Agarwal, Shri Dharmendra Agarwal, Shri Bindu Chandela are partners of the firm. During post search investigation, assessee Shri Hemant Garg has filed page wise reply and stated that pages do not belong to him. Further, on perusal of seized papers, it was found that year wise principle and interest amount were written on these pages and amount was divided by three. On going through these pages No.4 of exhibit No.4, it was inferred that Shri Hemant Garg Printed from counselvise.com ITA No. 448/JPR/2025 M/S Royal Developers, Jaipur. 5 received an amount of Rs.1,31,21,928/- as principle and interest amount from Royal Developers and Chomu House Project. With that ld. AO further inferred that Shri Hemant Garg and other two persons had given loan and advances to M/s Royal Developers in the cash as well as cheque mode and also received interest on these advances. Based on that seized material ld. AO prepared the year wise bifurcation of cash & cheque advances taken by respective firms/projects and interest received thereon were tabulated as under:- Royal Developers F.Y. Principle Amount (Cheque) Interest Cheque Principle amount (cash) Interest Cash Total Principle Interest 2014-15 3307500 384198 286900 7080 3594400 391278 2015-16 3166400 293668 1292000 80843 4458400 374511 Total 6473900 677866 1578900 87923 8052800 765789 Chomu House Total F.Y. Principle Amount (Cheque) Interest Cheque Principle amount (cash) Interest Cash Principle Interest 2012-13 12500000 1439634 1120000 90266 13620000 1529900 2013-14 9200000 2664384 72000 150984 72000 2815368 2014-15 Less 9400000 2564707 5279500 347512 5279500 2912219 2015-16 Balance 12330000 2094851 1550000 667658 13880000 2762509 Printed from counselvise.com ITA No. 448/JPR/2025 M/S Royal Developers, Jaipur. 6 Total 12330000 8762576 8021500 1256520 20351500 9277920 Considering that calculation it was noticed by the ld. AO that total part of interest and principle amount comes to Rs. 3,93,60,585/- and the same was considered as undisclosed / unaccounted income in the respective financial years in the hand of M/s Royal Developers in the form of cash/cheque loans and interest payments as tabulated herein below: A.Y. Principle Interest Total 2013-14 13620000 1529900 15149900 2014-15 72000 2816368 2888368 2015-16 8873900 3302997 12176897 2016-17 6008400 3137020 9145520 Total 39360585 Therefore, while assessment proceedings ld. AO specifically asked for the explanation of the undisclosed / unaccounted receipts, vide query letter dated 05.02.2021. The assessee submitted his reply/submission on 16.04.2021. Where in it was contended that while search action at the residential premises of Shri Hemant Garg on 16.1.2019 at 8, Indra Colony, Civil Lines, Sawai Madhopur various loose papers and documents were found and seized which includes pages Nos. 1 to 5 of Exhibit 4 of Annexure AS prepared at Printed from counselvise.com ITA No. 448/JPR/2025 M/S Royal Developers, Jaipur. 7 the said premises. These papers contained certain transactions carried out between Shri Dharmendra Kumar Agarwal, partner of assessee firm and Shri Hemant Garg (from whom possession the said papers were found). As per these papers certain calculations were found noted with respect to the purchase of 1/3rd of share of Shri Dharmendra Kumar Agarwal in the partnership firm M/s Royal Developers and also the Chomu House project. The papers contained the entries for F.Y. 2012-13 to 2015-16. Shri Dharmendra Agarwal while working out the additional undisclosed income for the block period has offered substantial amount on the investment made in the assessee firm and in Chomu House Project. The submission made in the case of Shri Dharmendra Agarwal in this regard is reproduced as under:- Investment in Chomu House and M/s Royal Developers The assessee is a partner in M/s Royal Developers, Jaipur alongwith Shri Om Prakash Gupta, Shri Rachit Agarwal, Smt. Bindu Chandela and M/s Saraf Buildestate Developers Pvt. Ltd. through Shri Rambabu Agarwal. This firm was constituted on 15.10.2014. The assessee has 15% share in the firm. The firm entered into a joint venture agreement for development of a property at Sardar Patel Marg, Jaipur. In this firm, the assessee contributed Rs. 64,73,900/- which is duly recorded in the books of accounts. The brother of the assessee Shri Ashok Kumar Gupta is also a shareholder cum director in M/s Shree Ram Om Real Estate Pvt. Ltd. In this company a Development Agreement for a property at 34, Chomu Kothi and Plot No. S-3 & S-4, Chomu House, Jaipur has been entered on 11.12.2013 with Shri Rao Surendra Pal Singh. In this company, Shri Ashok Kumar Gupta has contributed Rs. 1,27,83,473/- during F.Y. 2012-13 to 2014-15. Printed from counselvise.com ITA No. 448/JPR/2025 M/S Royal Developers, Jaipur. 8 In course of search, certain papers were found from the residential premises of Shri Hemant Garg marked as Annexure A-4 pages 1 to 5. According to these papers, the assessee and his brother Shri Ashok Kumar Gupta have made certain cash investment in the above concems apart from the investment made by cheque. The entire cash investment was made by the assessee who is handling the entire affairs of his family. As per these papers, the assessee has given 1/3rd of his share in M/s Royal Developers and 1/3rd share of his brother Shri Ashok Kumar Gupta in M/s Shree Ram Om Real Estate Pvt. Ltd. to Shri Hemant Garg. Accordingly, a calculation has been made by applying interest rate of 12% p.a. on the amount of investment made by the assessee and his brother Shri Ashok Kumar Gupta till 14.12.2015. According to this calculation, the amount receivable from Shri Hemant Garg in respect of investment made in Royal Developers and M/s Shree Ram Om Real Estate Pvt. Ltd. (Chomu House) is worked out at Rs. 1,31,21,928/- out of it Rs. 97,77,756/- was received from Shri Hemant Garg between 11.07.2015 to 14.12.2015. The amount due as on 14.12.2015 is worked out at Rs. 33,44,202/- which was subsequently received upto 31.03.2016. Thus, according to these papers, assessee received interest of Rs. 36,48,248/-[(Rs.92,77,920 + Rs. 16,66,823)/3] in A.Y. 2016-17 and made cash investment of Rs. 96,00,400/- during A.Y. 2013-14 to 2016-17 as under: A.Y. Chomu House Investment Royal Developer investment Total 2013-14 11,20,000 - 11,20,000 2014-15 72,000 - 72,000 2015-16 52,79,500 2,86,900 55,66,400 2016-17 15,50,000 12,92,000 28,42,000 Total 80,21,500 15,78,900 96,00,400 Out of the above investment, the assessee has source of Rs. 28,42,000/- in A.Y. 2016-17 being the booking amount of Shops/Kiosks of Trinetra Ganesh Smart Bazaar Developers Pvt. Ltd. for which income has been offered hereinabove. Accordingly, additional income of Rs. 11,20,000/- in A.Y. 2013-14, Rs. 72,000/- in A.Y. 2014-15 and Rs. 55,66,400/- in A.Y. 2015-16 on account of unexplained Investment and Rs. 36,48,248/- in A.Y. 2016-17 on account of interest is offered for tax as additional income. Further Shri Hemant Garg also accepted the investment made by him on account of purchase of 1/3rd share of the total investment made by Shri Dharmendra Agarwal in the assessee firm as well as in Chomu House Project and offered a sum of Rs. 1,31,21,928/- as unexplained investment in the said project and claimed application of the same out of the undisclosed income declared for the A.Y. 2016-17 when he had actually made the payment to Shri Dharmendra Agarwal towards the investment by him in earlier years. Printed from counselvise.com ITA No. 448/JPR/2025 M/S Royal Developers, Jaipur. 9 It was thus submitted that since the papers under reference are related to the transactions carried out between Shri Dharmendra Agarwal and Shri Hemant Garg and assessee firm has no relevance with the said papers, therefore, no adverse inference in the hands of the assessee firm is called for in this regard more particularly when the parties related to these papers i.e. Shri Dharmendra Agarwal and Shri Hemant Garg has categorically accepted these transactions as their undisclosed income / investment and paid the taxes thereon and any adverse inference in the hands of the assessee firm, if called for, the same would be double taxation of an income firstly in the hands of Shri Dharmendra Agarwal and Shri Hemant Garg and secondly in the hands of the assessee firm.\" The ld. AO noted that the above submission made by the assessee was not accepted for the following reasons:  The assessee has submitted that the papers under reference are related to the transaction carried out between Shri Dharmendra Agarwal and Shri Heman Garg and assessee firm has no relevance with the said papers is not acceptable.  Shri Dharmendra Agarwal, partner of the firm himself admitted the above transaction and offered income for taxation on the basis of these seized papers  Further Shri Hemant Garg, from whose possession the docuemnts were seized has also considered these papers while computing his undisclosed income  The offer of income on the basis of these papers is evidence that these papers contains the actual transactions related to the advances received by the firm  The transactions contain both cheque and cash, however the assessee has not furnished the explanation for these advances as well as source of interest expenses  The total of all the transactions comes to Rs. 39360585/- the one third part of it ie, approximate 1,31,21,928/- has been offered by Shri Dharmendra Agarwal and Shri Hemant Garg  The assessee has not disclosed the name of two other persons, as all the figures are divided in three persons. It is assumed that the other two persons sharing this calculation would be Shri Om Prakash Gupta and Shri Rachit Agarwal, who are also partner in the firm  The firm has received total amount of Rs. 3,93,60,585 during the period of four-year i.e. A.Y. 2013-14 to A.Y. 2016-17. However, the assessee has not furnished justified reply for the explanation of the same. Printed from counselvise.com ITA No. 448/JPR/2025 M/S Royal Developers, Jaipur. 10 Therefore, the submission of the assessee that the undisclosed income as found in the seized material during the course of search is not related to the assessee firm was not considered as acceptable. Further it was also stated that the assessee firm was constituted only on 15.10.2014. Hence, during the A.Y. 2013-14 and A.Y. 2014-15 firm was not in existence. Therefore, amount of Rs. 3,02,15,165/- (Principle 22565900/- + Rs. 7649265/-) for these years is being considered in the A.Y. 2015-16, as these funds have been invested by the assessee firm in its projects. The total amount received by the firm during these years, which is not explained by the assessee firm was considered as under:- A.Y. Principle Interest Total 2013-14 13620000 1529900 15149900 2014-15 7200 2816368 2888368 2015-16 8873900 3302997 12176897 22565900 7649265 30215165 Based on the above calculation ld. AO made the addition of Rs. 3,02,15,165/- in the hands of the firm as protective and he choose to tax the substantive addition in the hands of the partners Shri Dharmendra Agarwal, Shri Om Prakash Gupta and Shri Rachit Agarwal in the respective years. Printed from counselvise.com ITA No. 448/JPR/2025 M/S Royal Developers, Jaipur. 11 4. Aggrieved by the above order of the Assessing Officer the assessee preferred an appeal before the ld. CIT(A). After perusing the submissions of the assessee, the ld. CIT(A) has allowed the appeal of the assessee thereby observing as under : “Decision:- 12. The submission filed by the appellant has been considered. The appellant has enclosed the copy of assessment order passed in the case of Sh. Dharmedra Kumar Agarwal as per part of paperbook (Page 102-162). As per order, as regards cash investment in the firm Royal Developers and project Chomu House, Sh. Dharmendra Agarwal has offered investment made in cash of Rs.96,00,400/- and Rs. 36,48,248/- on account of interest received from Sh. Hemant Garg. On the perusal of assessment orders of Sh. Dharmendra Kumar Agarwal it has been noticed that issue of investment by Shri Dharmendra Kumar Agarwal has been discussed by his Id. AO in the assessment order as under:- Dharmendra Kumar Agarwal A.Y. Particulars Page No. of assessment order Addition 2013-14 Undisclosed investment in project chomu House 2 to 5 11,20,000 2014-15 Undisclosed investment in project chomu House 2 to 5 72,000 2015-16 Undisclosed investment in Chomu House/Royal Developers (Rs. 5279500/- for investment in Chomu House) (Rs. 286900/- for investment in Royal Developers) 6 to 10 55,66,400 2016-17 Undisclosed investment in Chomu House/Royal Developers (Rs. 1550000/- for investment in Chomu House) (Rs. 1292000/- for investment in Royal Developers) 31 to 35 28,42,000 2016-17 Income offered for taxation during course of assessment proceedings 27 to 31 36,48,248 Printed from counselvise.com ITA No. 448/JPR/2025 M/S Royal Developers, Jaipur. 12 on account of interest received from Hemant Garg Total 132,48,648 On perusal of the assessment order passed in the case of Shri Hemant Garg, as produced as part of paperbook (Page 163-236), it has been noticed that Id. AO has made addition in the hands of assessee with respect to investment in Chomu House -and-Royal Developers. The same is tabulated as under:- Hemant Garg A.Y. Particulars Addition Page No. of Asst. Order 2013- 14 Addition on account of unexplained advances and interest receipts in firm M/s Royal Developers 5049966 2 to 9 2014- 15 Addition on account of unexplained advances and interest receipts in firm M/s Royal Developers 962789 2 to 9 2015- 16 Addition on account of unexplained advances and interest receipts in firm M/s Royal Developers 4058965 5 to 12 2016- 17 Addition on account of unexplained advances and interest receipts in firm M/s Royal Developers 3048473 13 to 20 13. Investment/income w.r.t. Chomu House project The appellant has claimed that M/s ShreeramOm Real Estate Pvt Ltd is a private limited company and the project Chomu Kothi was being developed by it and the appellant furnished a copy of development agreement executed between Shri Rao Surendra Pal Singh, the owner and M/s Shreeram Om Real Estate Pvt Ltd., the developer for the development of property at 34, Chomu Kothi and Plot No. S-3 & S-4. Appellant has furnished ledger of Ashok Kumar Gupta in the books of Shree Ram Om Real Estate Pvt. Ltd. and on perusal of same it has been noticed that an amount of Rs. 1,23,30,000/- has been shown as receipt from Sh. Ashok Kumar Gupta. The Id. AO has worked out the unexplained investment in the project Chomu House of Rs. 1,23,30,000/- by way of cheque. In view of the development agreement furnished by the appellant, it is clear that the project \"Chomu Kothi belongs to Shri Rao Surendra Pal Singh and M/s Shree Ram Om Real Estate Pvt. Ltd. Printed from counselvise.com ITA No. 448/JPR/2025 M/S Royal Developers, Jaipur. 13 From perusal of APB 11 to 22, it is seen that at page 11 there is some calculation of interest without having any name on the top of the page, however, in the lower half of the page name 'Chomu House' is mentioned alongwith other details of cheque and cash amount in principal and also interest. Similarly page 13 contain the details of interest calculation in respect of cheque payment / investment in Chomu House project, as the name 'Chomu House' is mentioned on the top of this page. In fact the Id. AO has himself made two different tables on page 6 of the assessment order namely first for cheque and cash advances taken by Royal Developers and another for cheque and cash advances taken for Chomu House project. It has been explained by the Id. AR that the Chomu House project is being owned by M/s Shree Ram Om Real Estate Pvt. Ltd. and in support of same the appellant has furnished collaboration agreement [APB 89), the schedule A of which contains detail about Chomu Kothi and Plot No. S-3 and S-4 being part of the collaboration agreement between M/s Shree Ram Om Real Estate Pvt. Ltd. and Rao Surendra Pal Singh [the owner of the land]. The appellant has furnished the ledger of Shri Ashok Kumar Gupta (APB-22), the unexplained investment of Rs.1,23,30,000/- as worked out by Id. AO is found recorded in the books of M/s Shree Ram Om Real Estate Pvt. Ltd as per ledger produced by the appellant. Thus it is evident that transactions of Chomu House project can in no way be considered to be belonging to the appellant firm M/s Royal Developers and no addition is liable to be sustained in the hands of the appellant. Thus, action of AO in adding the amount relatable to Chomu House Project in the case of appellant firm totalling to Rs. 15,50,000/- Rs. 27,62,509/- Rs. 43,12,509/-is unjustified and directed to be deleted. 14. Investment through banking channel:- While completing the assessment Id. AO also erred in making the addition of Investment made by Shri Dharmendra Agarwal in assessee firm through Banking Channels which is duly recorded in the books of accounts of assessee firm. Copy of Financial Statements along with Dharmendra Agarwal Capital Account in the books of assessee firm were enclosed. (APB 31). On perusal of the capital account of M/s Royal Developers furnished as part of paperbook, it has been noticed that Sh. Dharmendra Agarwal hold 15% of share in the said firm and his capital investment in the said firm was as under:- Date Capital Remarks Printed from counselvise.com ITA No. 448/JPR/2025 M/S Royal Developers, Jaipur. 14 Balance as on 31.03.2015 33,07,500 Balance as on 31.03.2016 64,73,900 Addition of Rs. 31,66,400 to the capital during the year FY 2016-17 Thus it is found that the amount which was found recorded in seized papers which has been treated as advance/loan is capital contribution by Sh. Dharmendra Agarwal in the appellant firm. The Id. AO while working out the unexplained investment in the firm has included the above amount. However, on perusal of capital account of the Firm M/s Royal Developer, the above amount is found recorded in the books of the firm. As per APB-55, ledger account of capital account is submitted that it is seen that Rs. 31,66,400 is through banking channel RTGS. Further, no substantive addition has been made by the learned AO in this regard in the hands of any of the partners. In view of the above discussion the additions made in the hands of the appellant with respect to the capital contribution by the partners as recorded in the books of accounts of the appellant firm are hereby directed to be deleted. 15. The reconcilliartion regarding unexplained investment as worked out by the ld. AO and addition of saidamount is given as under:- 1. Undisclosed investment Royal Developers:- Year Principle Aount (cheque) Interest cheque Principle amount (cash) Interest cash Total protective addition in hands of Royal Developers Corresponding substantive additions or additional income offered details (A) (B) (C) (D) FY 2014-15 AY 2015-16 3307500 384193 2869007080 7080 3985673 -Rs. 33,07,500 not added. It is seen that it is capital contribution made by Sh. Dharmendra Agarwal in Royal Developer in F.Y. 2014-15 and is recorded in books. -Rs. 3,84,193 not added. It is part of the discussion in following paragraphs in this order. -Rs. 2,86,900 added Printed from counselvise.com ITA No. 448/JPR/2025 M/S Royal Developers, Jaipur. 15 substantively in hands of Sh. Dharmendra Agarwal in Α.Υ. 2015-16. -Rs. 7,080 not added. It is part of the discussion in following paragraphs in this order. FY 2015-16 AY 2016-17 3166400 293668 1292000 80843 4832911 -Rs. 31,66,400 not added. II is seen that it is capital contribution made by Sh. Dharmendra Agarwal in Royal Developer in F.Y. 2014-15 and is recorded in books. -Rs. 2,93,668 not added. It is part of the discussion in following paragraphs in this order. -Rs. 12,92,000 added substantively in hands of Sh. Dharmendra Agarwal inAY 2016-17. -Rs. 80,843 not added. It is part of the discussion in following paragraphs in this order. Total 6473900 677866 1578900 87923 1. Undisclosed investment in project Chomu house:_ Year Principle Aount (cheque) Interest cheque Principle amount (cash) Interest cash Total protective addition in hands of Royal Developers Corresponding substantive additions or additional income offered details (A) (B) (C) (D) FY 2012-13 AY 2013-14 12500000 1439634 1120000 90266 15149900 -Rs. 1,25,00,000 not added as it is recorded in the books of Shreeramom Real Estate Pvt. Ltd. It is seen that it is capital contribution and is recorded in books. -Rs.14,39,634 not added. It is part of the discussion in following paragraphs in this order. -Rs. 11,20,000 added in hand of Dharmendra Agarwal in A.Y. 2013-14. -Rs.90,266 not added. It is part of the discussion in Printed from counselvise.com ITA No. 448/JPR/2025 M/S Royal Developers, Jaipur. 16 following paragraphs in this order. FY 2013-14 AY 2014-15 9200000 2664384 72000 150984 12087368 -Rs.92,00,000 not added. It is seen that it is capital contribution and is recorded in books. -Rs.26,64,384 not added. I is part of the discussion in following paragraphs in this order. -Rs.72,000 added in hand of Dharmendra Agarwal in Α.Υ. 2014-15. -Rs. 1,50,984 not added. It is part of the discussion in following paragraphs in this order. FY 2014-15 AY 2015-16 2564707 5279500 347512 8191719 No capital addition in this year -Rs. 25,64,707 not added. It is part of the discussion in following paragraphs in this order. -Rs.52,79,500 added in hand of Dharmendra Agarwal in A.Y.2015-16 -Rs.3,47,512 not added. It is part of the discussion in following paragraphs in this order. FY 2015-16 AY 2016-17 2094851 1550000 667658 4321509 -No capital addition in this year -Rs. 20,94,851 not added. It is part of the discussion in following paragraphs in this order. -Rs. 15,50,000 added in hand Dharmendra of Agarwal in A.Y. 2016-17 -Rs.6,67,658 not added. It is part of the discussion in following paragraphs in this order. Total 12330000 8762576 8021500 1256420 The conclusion to be drawn from the above is that the learned AO has not made substantive addition for (i) principal amount in cheque, (ii) interest amount in cheque, (iii) interest amount in cash. While the issue of principal amount in Printed from counselvise.com ITA No. 448/JPR/2025 M/S Royal Developers, Jaipur. 17 cheque has been discussed in the earlier paragraphs also and since the same already recorded in the books of accounts, in the facts of the case, the question of addition in this regard does not arise. 16. Nature of the transaction:- The appellant has inter-alia submitted in this regard as under:- The Id. AO while reading the seized documents found from the possession of Shri Hemant Garg and marked as page 1 to 8 and enclosed at APB 11 to 22 has wrongly conceptualized the entries found noted as belonging to the assessee firm To clarify, page-wise explanation of the seized documents are as under:  First Image at Page 3 of Assessment Order: Ld. AO has reproduced the seized page marked as Annexure 'A' Exhibit 4 Page 5 (APB 15). This page contains year wise investment by Shri Dharmendra Agarwal and family in Chomu House Project owned by M/s Shree Ram Om Real Estate Pvt Ltd. and calculation of Interest thereon calculated for the determining value of 1/3rd share of the total share of Shri Dharmendra Agarwal and family which was sold to Shri Hemant Garg (from whom possession such paper were seized). It is also relevant to state that entire transaction are summarized at Annexure A Exhibit 4 Page 4 (APB 14) and same is reproduced at page 5 of Assessment Order (second image).  First Image at Page 4 of Assessment Order: Ld. AO has reproduced the seized page at Annexure 'A' Exhibit 4 Page 2 (APB 12). This page contains year wise investment of Shri Dharmendra Agarwal (Partner of Assessee firm) in cash and cheque and calculation of interest thereon calculated for determining value of 1/3rd share of the total shares of Shri Dharmendra Agarwal which was sold to Shri Hemant Garg (from whom possession such paper were seized). It is also relevant to state that entire transaction are summarized at Annexure A Exhibit 4 Page 4 (APB 14) and same is reproduced at page 5 of Assessment Order (Second Image).  Second Image at Page 4 of Assessment Order: Ld. AO has reproduced the seized page at Annexure 'A' Exhibit 4 Page 8 (APB 20). This page contains date wise investment of Shri Dharmendra Agarwal and farnily in Chomu House Project owned by the Mis Shree Ram Printed from counselvise.com ITA No. 448/JPR/2025 M/S Royal Developers, Jaipur. 18 Om Real Estate Pvt. Ltd. It is also relevant to state that entire transaction are summarized at Annexure A Exhibit 4 Page 4 (APB 14) and same is reproduced at page 5 of Assessment Order. Further the seized pages placed at APB 18 & 19 duly matches with the entries found at APB 20 and relates to M/s Shree Ram Om Real Estate Pvt. Ltd.  First Image at Page 5 of Assessment Order Ld. AO has reproduced the seized page at Annexure 'A' Exhibit 4 Page 1 (APB 11). This page contains year wise investment of Shri Dharmendra Agarwal and family in Chomu House Project owned by the Mis Shree Ram Om Real Estate Pvt. Ltd. and calculation of Interest thereon calculated for the determining value of 1/3rd share of the total shares of Shri Dharmendra Agarwal and family which was sold to Shri Hemant Garg (from whom possession such paper were seized). It is also relevant to state that entire transaction are summarized at Annexure A Exhibit 4 Page 4 (APB 14) and same is reproduced at page 5 of Assessment Order.  Second-Image-at-Page-5-of-Assessment Order- Ld. AO has reproduced the seized page at Annexure 'A' Exhibit 4 Page 4 (APB 14). This page contains summary of investment of Shri Dharmendra Agarwal and famly in Chomu House Project owned by the M/s Shree Ram Om Real Estate Pvt. Ltd. & assessee firm. It is submitted that entire working is done to determine value of 1/3rd share of the total shares of Shri Dharmendra Agarwal which was sold to Shri Hemant Garg (from whom possession such paper were seized). To further co-relate the papers found during the course of search and marked as Annexure 'A' Exhibit 4 page 1 to 5 (APB-11-16), it is submitted that page 4 is a summary page of all the other pages The contention of the appellant is prima-facie correct. This also gets corroborated with the fact that no substantive addition has been made in hands of any assessee by the learned AO with respect to the interest with respect to the capital in cheque and interest with respect to investment in cash. Transaction Noted in seized paper are not entered into by assessee firm and none of the partners have stated that such transaction are under taken by the assessee firm. Two independent persons being the partner of appellant firm, had entered into mutual agreement wherein one party i.e. Shri Dharmendra Agarwal has sold 1/3rd of his and his brother share in two projects i.e. Chomu House & Royal Developers to another party i.e. Shri Hemant Garg. Ld. AO has Printed from counselvise.com ITA No. 448/JPR/2025 M/S Royal Developers, Jaipur. 19 not doubted the factual position. Sh. Dharmendra Kumar Agarwal has given 1/3rd of his share in the appellant firm M/s Royal Developers and 1/3rd. share of his brother Shri Ashok Kumar Gupta in M/s Shree Ram Om Real Estate Pvt. Ltd. to Shri Hemant Garg and total part of unexplained principle and interest amount came to Rs.3,93,60,585/-. The flow of the figures in the seized documents as extracted in the assessment order also show that the interest figures have been calculated on a notional basis to arrive at the amount payable or receivable between the individuals Sh. Dharmendra Kumar Agarwal and Shri Hemant Garg. No income has been earned by the appellant in this regard. Further in this regard no substantive addition has been made by the learned AO with respect to the corresponding protective addition made in the hands of the appellant. In view of this discussion the protective addition does not survive. 5. Ground of Appeal No. 4 is as under: Ground No. 4: On the facts and in the circumstances of the case and in law, Id.AO has grossly erred in initiating the penalty proceedings u/s 271(1) (c) of the Income Tax Act, 1961. 5.1 The ground is general in nature. The grounds are pre-mature as these are against mere initiation of penalty proceedings. Penalty proceedings are independent proceedings and the appellant is required to make his submissions before the appropriate authority during the penalty proceedings. Accordingly, the ground of appeal raised by the appellant on this issue is treated as disposed off. 6. Ground of Appeal No. 5 is as under: Ground No. 5: That the appellant craves the right to add, delete, amend or abandon any of the grounds of appeal either before or at the time of hearing of appeal. 6.1 The appellant has not added or altered any of the above mentioned grounds of appeal. Accordingly such mention by the appellant in its ground is treated as general in nature, not needing any specific adjudication and is accordingly treated as disposed off. 7. In the result, the appeal of the appellant is allowed.” 5. Feeling dissatisfied with the above finding so recorded by the ld. CIT(A) the present appeal is filed by the revenue on the grounds Printed from counselvise.com ITA No. 448/JPR/2025 M/S Royal Developers, Jaipur. 20 as reiterated herein above in para 2. Apropos to the grounds so raised ld. DR heavily relied upon the finding of the ld. AO that Shri Dharmendra Agarwal, partner of the firm himself admitted the above transaction and offered income for taxation on the basis of these seized papers. She also emphasized that Shri Hemant Garg, from whose possession the documents were seized has also considered these papers while computing his undisclosed income. Thus, the offering of the income confirms that the actual transactions related to the advances received by the firm were undertaken. The transactions contain both cheque and cash, however the assessee has not furnished the explanation for these advances as well as source of interest expenses. As is evident that total of all the transactions comes to Rs. 3,93,60,585/- the one third part of it i.e. approximate 1,31,21,928/- has been offered by Shri Dharmendra Agarwal and Shri Hemant Garg and the assessee has not disclosed the name of two other persons, as all the figures are divided in three persons. Based on that submission ld. DR supported the finding recorded in the order of the assessing officer. 6. On the other hand, ld. AR of the assessee supported the findings so recorded in the order of the ld. CIT(A). The ld. AR of the Printed from counselvise.com ITA No. 448/JPR/2025 M/S Royal Developers, Jaipur. 21 assessee in continuation to the finding of the ld. CIT(A) also filed the following written submissions: “Brief facts of the case are that assessee is a partnership firm incorporated on “15.10.2014” and engaged in the Real Estate Business. Details of partners in the firm are as under— Name of Partner Share (%) M/s SarafBuildestate Developers Private Limited 47.50% Shri Om Prakash Gupta 22.50% Shri Dharmendra Agarwal 15.00% Shri Rachit Agarwal 10.00% Smt. BinduChandela 5.00% Assessee is a part of group popularly known as “Om Agarwal Group”. A search and seizure action was carried out on 16.01.2019at the business and residential premises of the assessee and other concerns of Group. During the course of search, at the residential premises of Shri Hemant Garg on 16.01.2019 at 8, Indra Colony, Civil Lines, SawaiMadhopur various loose papers and documents were found and seized which includes pages Nos. 1 to 8 of Exhibit 4 of Annexure AS (APB 11-22). These papers contained certain transactions carried out between Shri Dharmendra Kumar Agarwal, partner of assessee firm and Shri Hemant Garg for which assessee firm during the course of assessment provided the detailed explanation. However, ld. AO without considering the submission made by assessee firm completed the assessee u/s 153A of the Act by making protective addition in the hands of assessee firm of Rs. 3,02,15,165/-on account of alleged unexplained advances received by assessee firm and interest paid thereon. Aggrieved of the additions so made, assessee has preferred an appeal before ld. CIT()A, wherein ld. CIT(A) vide order dated 30.01.2025 allowed the appeal of assessee by deleting the protective addition made in the hands of assessee firm. Printed from counselvise.com ITA No. 448/JPR/2025 M/S Royal Developers, Jaipur. 22 Aggrieved by the order of ld. CIT(A) department has preferred an appeal before your honours. Groundwise submission is made as under— Departmental Grounds of Appeal No. 1 to 3: In all these grounds of appeal, department has challenged the action of ld. CIT(A) in deleting the addition made by ld.AO on account of alleged advances received and interest paid by the assessee firm on the basis of allegedentries found noted in the seized paper found from the residential premises of the Shri Hemant Garg. Brief facts of the grounds as stated above are that during the course of search, at the residential premises of Shri Hemant Garg on 16.01.2019 at 8, Indra Colony, Civil Lines, SawaiMadhopur various loose papers and documents were found and seized which includes pages Nos. 1 to 8 of Exhibit 4 of Annexure AS (APB 11-22). On perusal seized papers, it is evident that these paper contained certain transactions carried out between Shri Dharmendra Kumar Agarwal, partner of assessee firm and Shri Hemant Garg. (from whose possession the said papers were found). As per these papers certain calculation were found noted with respect to the purchase of 1/3rd of share of Shri Dharmendra Kumar Agarwal & family in the partnership firm M/s Royal Developers and in M/s Shree Ram Om Real Estate Pvt. Ltd. wherein the Chomu House project is going on. To further elaborate it is submitted that in M/s Shree Ram Om Real Estate Pvt. Ltd. a Development Agreement for a property at 34, ChomuKothi and Plot No. S-3 & S-4, Chomu House, Jaipur has been executed on 11.12.2013 with Shri Rao Surendra Pal Singh(APB 66-101). The papers as mentioned above contained the entries for F.Y. 2012-13 to 2015-16 wherein Shri Dharmendra Agarwal as well as Shri Hemant Garg while working out the additional undisclosed income for the search period has offered substantial amount on the investment made in the assessee firm and in Chomu House Project owned by the M/s Shri Ram Om Real Estate Pvt. Ltd. For the sake of convenience, extract of submission made in the case of Shri Dharmendra Agarwal in this regard is reproduced as under (APB 32-51)— Investment in Chomu House and M/s Royal Developers Printed from counselvise.com ITA No. 448/JPR/2025 M/S Royal Developers, Jaipur. 23 The assessee is a partner in M/s Royal Developers, Jaipur alongwith Shri Om Prakash Gupta, Shri Rachit Agarwal, Smt. BinduChandela and M/s SarafBuildestate Developers Pvt. Ltd. through Shri Rambabu Agarwal. This firm was constituted on 15.10.2014. The assessee has 15% share in the firm. The firm entered into a joint venture agreement for development of a property at Sardar Patel Marg, Jaipur. In this firm, the assessee contributed Rs. 64,73,900/- which is duly recorded in the books of accounts. The brother of the assessee Shri Ashok Kumar Gupta is also a shareholder cum director in M/s Shree Ram Om Real Estate Pvt. Ltd. In this company a Development Agreement for a property at 34, ChomuKothi and Plot No. S-3 & S-4, Chomu House, Jaipur has been entered on 11.12.2013 with Shri Rao Surendra Pal Singh. In this company, Shri Ashok Kumar Gupta has contributed Rs. 1,27,83,473/- during F.Y. 2012-13 to 2014-15. In course of search, certain papers were found from the residential premises of Shri Hemant Garg marked as Annexure A-4 pages 1 to 5. According to these papers, the assessee and his brother Shri Ashok Kumar Gupta have made certain cash investment in the above concerns apart from the investment made by cheque. The entire cash investment was made by the assessee who is handling the entire affairs of his family. As per these papers, the assessee has given 1/3rd of his share in M/s Royal Developers and 1/3rd share of his brother Shri Ashok Kumar Gupta in M/s Shree Ram Om Real Estate Pvt. Ltd. to Shri Hemant Garg. Accordingly, a calculation has been made by applying interest rate of 12% p.a. on the amount of investment made by the assessee and his brother Shri Ashok Kumar Gupta till 14.12.2015. According to this calculation, the amount receivable from Shri Hemant Garg in respect of investment made in Royal Developers and M/s Shree Ram Om Real Estate Pvt. Ltd. (Chomu House) is worked out at Rs. 1,31,21,928/- out of it Rs. 97,77,756/- was received from Shri Hemant Garg between 11.07.2015 to 14.12.2015. The amount due as on 14.12.2015 is worked out at Rs. 33,44,202/- which was subsequently received upto 31.03.2016. Thus, according to these papers, assessee received interest of Rs. 36,48,248/- [(Rs.92,77,920 + Rs.16,66,823) / 3] in A.Y. 2016-17 and made cash investment of Rs. 96,00,400/- during A.Y. 2013-14 to 2016-17 as under: A.Y. Chomu House Investment Royal Developer Investment Total 2013-14 11,20,000 - 11,20,000 2014-15 72,000 - 72,000 Printed from counselvise.com ITA No. 448/JPR/2025 M/S Royal Developers, Jaipur. 24 2015-16 52,79,500 2,86,900 55,66,400 2016-17 15,50,000 12,92,000 28,42,000 Total 80,21,500 15,78,900 96,00,400 Out of the above investment, the assessee has source of Rs. 28,42,000/- in A.Y. 2016-17 being the booking amount of Shops / Kiosks of Trinetra Ganesh Smart Bazaar Developers Pvt. Ltd. for which income has been offered hereinabove. Accordingly, additional income of Rs. 11,20,000/- in A.Y. 2013-14, Rs. 72,000/- in A.Y. 2014-15 and Rs. 55,66,400/- in A.Y. 2015-16 on account of unexplained investment and Rs. 36,48,248/- in A.Y. 2016-17 on account of interest is offered for tax as additional income. Further Shri Hemant Garg also accepted the investment made by him on account of purchase of 1/3rd share of the total investment made by Shri Dharmendra Agarwal in the assessee firm as well as in Chomu House Project owned by the M/s Shri Ram Om Real Estate Pvt. Ltd. and offered a sum of Rs. 1,31,21,928/- as unexplained investment in the said project and claimed application of the same out of the undisclosed income declared for the A.Y. 2016-17 when he had actually made the payment to Shri Dharmendra Agarwal towards the investment done by him in earlier years. Copy of Submission made during the course of assessment by Shri Hemant Garg is enclosed at APB (52-63). With this background, firstly it is submitted that addition made by ld. AO is solely based on the sized record without considering the submission of assesse. It is also relevant to state that even if ld. AO was not satisfied with the submission made by the assessee firm in that case ld. AO could have issued summon and would have made necessary enquiries and recorded statement from the other partners of the assessee firm instead of solely relying on the seized record. Secondly, the ld. AO has brushed aise the submission of the partner of assessee firm who has categorically submitted that the transaction does not belong to the assessee firm and has been executed by him in his individual capacity. Also the ld, AO has failed to record any further statement of the partner of the assessee firm in support of the submissions filed, evidence adduced and additional income offered by resoecrtive partners. Printed from counselvise.com ITA No. 448/JPR/2025 M/S Royal Developers, Jaipur. 25 Thirdly, it is reiterated that the transaction noted in the seized papers pertains to two independent persons i.e. Shri Dharmendra Agrawal & Shri Hemant Garg who not only owned these transactions but also offered additional income on the basis of such seized papers. It is further relevant to state that ld. AO has already made the substantive addition in the hands of Shri Dharmendra Agrawal as well as Shri Hemant Garg based on the Fund Flow statement of Additional Undisclosed Income (APB 51 & 63) prepared on the basis of seized papers. Shri Dharmendra Agrawal as well as Shri Hemant Garg has never challengedadditions related to undisclosed income offered on the basis of seized papers before the Appellate Authorities. Thus the action of ld. AO in making protective addition in the hands of assessee firm, despite the fact that substantive addition are made and confirmed in the hands of Shri Dharmendra Agrawal as well as Shri Hemant Garg will tantamount to double addition of income and is against the law and deserve to be deleted. Without prejudice to above, the following submission is made: 1. Assessee Firm not in existence: It is submitted that assessee firm was incorporated on 15.10.2014 i.e. in A.Y. 2015-16. However ld. AO while completing the assessment for the A.Y. 2015-16, made the addition of entries pertaining to A.Y. 2013- 14 and A.Y. 2014-15 by alleging that assessee firm had made investment before its incorporation date. Break up of addition for each year is as under— A.Y. in which addition Made A.Y. for which Transaction pertains to Principle Interest Total 2015-16 2013-14 1,36,20,000/- 15,29,900/- 1,51,49,900/- 2014-15 72,000/- 28,16,368/- 28,88,368/- 2015-16 88,73,900/- 33,02,997/- 1,21,76,897/- Total 2,25,65,900/- 76,49,265/- 3,02,15,165/- On perusal of aforesaid table it is clearly evident that during the year under consideration, ld. AO acted in whims and fanciesin making the addition of transaction pertaining to A.Y. 2013-14 & A.Y. 2014-15 equivalent to Rs. 1,51,49,900/- & 28,88,368/- despite the fact assessee firm was not incorporated in these years. Thus the action of ld. AO in making the addition to the extent of Rs. 1,51,49,900/- & 28,88,368/- pertaining to A.Y. 2013-14 & 2014-15 respectively in A.Y. 2015-16 deserves to be deleted outrightly. Printed from counselvise.com ITA No. 448/JPR/2025 M/S Royal Developers, Jaipur. 26 2. Observations of ld. AO while making protective addition: The Ld. AO while concluding the assessment has made protective addition in two different years out of which in one year the department is in appeal as under: S.No. A.Y. Protective addition made by AO 1. 2015-16 3,02,15,165.00 Also while passing the assessment order, ld. AO at Page 11 of Assessment Order has stated that substantive addition has been in the hands of the persons i.e. Shri Dharmendra Agarwal, Shri Om Prakash Gupta and Shri Rachit Agarwal. The relevant para of the assessment order at page 11 & 12, reads as under: “The above total amount mentioned in the seized papers amounting to Rs. 3,93,60,585/- has been substantively added in the hands of its partners i.e. Shri Dharmendra Agarwal, Shri Om Prakash Gupta and Shri Rachit Agarwal in the respective years. Therefore, the amount of Rs. 2,25,65,900/- received by the assessee firm during the years under consideration and interest expenses of Rs. 76,49,265/- is being added protectively to the total income of assessee firm….” However on perusal of Assessment orders of Shri Rachit Agarwal & Shri Om Prakash Gupta, it transpires that ld. AO has not made any addition in the hands of Shri Rachit Agarwal and Shri Om Prakash Gupta, relevant copy of Assessment Orders are enclosed herewith. S.No. Name of Assessee Order of A.Y. Date of passing assessment order APB 1. Om Prakash Gupta 2013-14 17.07.2021 237-262 2. Om Prakash Gupta 2014-15 17.07.2021 263-284 3. Om Prakash Gupta 2015-16 17.07.2021 285-298 4. Om Prakash Gupta 2016-17 16.07.2021 299-338 5. Rachit Agarwal 2013-14 22.04.2021 339-340 6. Rachit Agarwal 2014-15 22.04.2021 341-342 7. Rachit Agarwal 2015-16 22.04.2021 343-344 8. Rachit Agarwal 2016-17 22.04.2021 345-346 From the perusal of above orders, it clearly transpires that the ld. AO has not made any addition in the case of Shri Om Prakash Gupta and Shri Rachit Agarwal and moreover the ld. AO has made addition in the Printed from counselvise.com ITA No. 448/JPR/2025 M/S Royal Developers, Jaipur. 27 case of Shri Dharmendra Agarwal and Shri Hemant Garg. The relevant observations of the ld. AO in the said orders are as under: Relevant extract of Assessment order passed u/s 153A of the Income Tax Act, 1961 in the case of Shri Dharmendra Agarwal:  Assessment order dated 09.07.2021 for A.Y. 2013-14 [APB 102- 107]: “The assessee has offered an amount Rs. 11,20,000/- for investment in project Chomu House during the assessment proceeding for the year under consideration. However, he has not filed revised return of income but furnished revised computation of income disclosing above income and he agreed to pay due taxes on the basis of transactions mentioned in the seized material. The working of the assessee is accepted on this issue. Therefore, undisclosed investment amounting to Rs. 11,20,000/- which was disclosed in the seized material found from the residence of the Shri Hemant Garg is being treated as unexplained investment of assessee for the year under consideration and the same is being added to the total income of the assessee u/s 69 of the I.T. Act, 1961 and to be taxed as per the provisions of section 115BBE and accordingly taxed as per the provisions of section 115BBE(1).”(Relevant APB 106)  Assessment order dated 09.07.2021 for A.Y. 2014-15 [APB 108- 113]: “The assessee has offered an amount Rs. 72,000/- for investment in project Chomu House during the assessment proceeding for the year under consideration. However, he has not filed revised return of income but furnished revised computation of income disclosing above income and he agreed to pay due taxes on the basis of transactions mentioned in the seized material. The working of the assessee is accepted on this issue. Therefore, undisclosed investment amounting to Rs. 72,000/- which was disclosed in the seized material found from the residence of the Shri Hemant Garg is being treated as unexplained investment of assessee for the year under consideration and the same is being added to the total income of the assessee u/s 69 of the I.T. Act, 1961 and to be taxed as per the provisions of section 115BBE and Printed from counselvise.com ITA No. 448/JPR/2025 M/S Royal Developers, Jaipur. 28 accordingly taxed as per the provisions of section 115BBE(1).” (Relevant APB 112)  Assessment order dated 09.07.2021 for A.Y. 2015-16 [APB 114- 124]: “The assessee has disclosed an amount of Rs. 55,66,400/- (Rs. 52,79,500/- for investment in Chomu House and Rs. 2,86,900/- for investment in Royal Developers) during the assessment proceeding. The assessee has claimed benefit of application of income against the amount of investment made in the project Chomu House and Royal Developers. However, the claim of the assessee is not allowed due to the following reasons:- • The submission of the assessee has been verified from the seized material and it was accepted that the assessee has made investment of Rs. 55,66,400/- in the project Chomu house and Royal Developers • The assessee has submitted that the source of investment in the above transaction was from the income offered for taxation and claimed for application of income, which is not acceptable • The assessee has not furnished day to day cash book from which it could be verified that the investment made in the above project was out of the income offered for taxation • The assessee has not furnished any documentary evidence for his claim. The submission of the assesse that the undisclosed investment as found in the seized material during the course of search is explained/considered in total income is not acceptable in the absence of the documentary evidences of the same. The assessee has failed to link the cash receipts/income offered for taxation with the investment made in project Chomu House and Royal Developers. Therefore, undisclosed investment amounting to Rs. 55,66,400/- which was disclosed in the seized material found from the residence of the Shri Hemant Garg is being treated as unexplained investment of assessee for the year under consideration and the same is being added to the total income of the assessee u/s 69 of the I.T. Act, 1961 and to be taxed as per the provisions of section 115BBE and Printed from counselvise.com ITA No. 448/JPR/2025 M/S Royal Developers, Jaipur. 29 accordingly taxed as per the provisions of section 115BBE(1).” (Relevant APB 122-123)  Assessment order dated 09.07.2021 for A.Y. 2016-17 [APB 125- 162]: “The assessee has disclosed an amount of Rs. 28,42,000/- (Rs. 15,50,000/- for investment in Chomu House and Rs. 12,92,000/- for investment in Royal Developers) during the assessment proceeding. The assessee has claimed benefit of application of income against the amount of investment made in the project Chomu House and Royal Developers. The assessee has submitted that the source of the investment of Rs. 28,42,000/- was out of cash receipts/income as offered for taxation. However, the claim of the assessee is not allowed due to the following reasons:- • The submission of the assessee has been verified from the seized material and it was accepted that the assessee has made investment of Rs. 28,42,000/- in the project Chomu house and Royal Developers • The assessee has submitted that the source of investment in the above transaction was from the cash receipts from the profit share received from Trinetra Ganesh Smart Bazaar Developers Pvt. Ltd. • The assessee has not furnished day to day cash book from which it could be verified that the investment made in the above project was from the cash receipts from Trinetra Ganesh Smart Bazaar Developers Pvt. Ltd. • The assessee has not furnished any documentary evidence for his claim Therefore, the submission of the assesse that the undisclosed investment as found in the seized material during the course of search is explained/considered in total income is not acceptable in the absence of the documentary evidences of the same. The assessee has failed to link the cash receipts from Trinetra Ganesh Smart Bazaar Developer Pvt. Ltd./income offered for taxation with the investment made in project Chomu House and Royal Developers. Printed from counselvise.com ITA No. 448/JPR/2025 M/S Royal Developers, Jaipur. 30 Therefore, undisclosed investment amounting to Rs. 28,42,000/- which was disclosed in the seized material found from the residence of the Shri Hemant Garg is being treated as unexplained investment of assessee for the year under consideration and the same is being added to the total income ofthe assessee u/s 69 of the I.T. Act, 1961 and to be taxed as per the provisionsof section 115BBE and accordingly taxed as per the provisions of section 115BBE (1).” (Relevant APB 160) Relevant extract of Assessment order passed u/s 153A of the Income Tax Act, 1961 in the case of Shri Hemant Garg:  Assessment order dated 07.07.2021 for A.Y. 2013-14 [APB 163- 184]: “However, the submission of the assesse is unacceptable for the following reason: • The assesse has not furnished documentary evidences for his claim • The assessee has submitted that the source of investment in the Royal Developer was from the income offered for taxation for the year under consideration. • The assessee has not furnished day to day cash book from which it could be verified that the investment made in the Royal Developer was from the income offered for taxation • As per seized material the assessee has made investment in the four years, however he claimed that he has made total payment in the A.Y. 2016-17 out of the receipts from being sole selling agent of GP Tower and Trinetra Ganesh Smart Bazar. However, he has not submitted any proof for the payment of the same in A.Y. 2016-17. Therefore, the submission of the assessee is not accepted. Therefore, the submission of the assesse that the undisclosed income as found in the seized material during the course of search is explained/considered in total income is not acceptable in the absence of documentary evidences in support of claim of the assessee. Therefore, undisclosed investment and interest income amounting to Rs. 5049966/- which was found recorded in the seized material found from the residence of Shri Hemant Garg is being treated as Printed from counselvise.com ITA No. 448/JPR/2025 M/S Royal Developers, Jaipur. 31 unexplained investment and unaccounted income of assessee for the year under consideration and the same is being added to the total income of the assessee u/s 69 of the I.T. Act, 1961 and to be taxed as per the provisions of section 115BBE and accordingly taxed as per the provisions of section 115BBE(1).” (Relevant APB 170-171)  Assessment order dated 08.07.2021 for A.Y. 2014-15 [APB 185- 202]: “However, the submission of the assessee is unacceptable for the following reasons: • The assessee has not furnished documentary evidences for his claim • The assessee has submitted that the source of investment in the Royal Developer was from the income offered for taxation for the year under consideration, but no evidences or day to day cash book from which it could be verified that the investment made in the Royal Developer was from the income offered for taxation • As per seized material the assessee has made investment in the four years, however he claimed that he has made total payment in the A.Y. 2016-17 out of the receipts from being sole selling agent of GP Tower and Trinetra Ganesh Smart Bazar. However, he has not submitted any proof for the payment of the same in A.Y. 2016-17. Therefore, the submission of the assessee is not accepted. Therefore, the submission of the assesse that the undisclosed income as found in the seized material during the course of search is explained/considered in total income is not acceptable in the absence of the documentary evidences in support of claim of the assessee. 4.5 Therefore, undisclosed investment and interest income amounting to Rs. 962789/- which was disclosed in the seized material found from the residence of Shri Hemant Garg is being treated as unexplained investment and unaccounted income of assessee for the year under consideration and the same is being added to the total income of the assessee u/s 69 of the I.T. Act, 1961 and to be taxed as per the provisions of section 115BBE and accordingly taxed as per the provisions of section 115BBE(1).” (Relevant APB 192-193) Printed from counselvise.com ITA No. 448/JPR/2025 M/S Royal Developers, Jaipur. 32  Assessment order dated 08.07.2021 for A.Y. 2015-16 [APB 203- 215]: “However, the submission of the assesse is unacceptable for the following reasons: • The assesse has not furnished documentary evidences for his claim • The assessee has submitted that the source of investment in the Royal Developer was from the income offered for taxation for the year under consideration. • The assessee has not furnished day to day cash book from which it could be verified that the investment made in the Royal Developer was from the income offered for taxation • As per seized material the assessee has made investment in the four years, however he claimed that he has made total payment in the A.Y. 2016-17 out of the receipts from being sole selling agent of GP Tower and Trinetra Ganesh Smart Bazar. However, he has not submitted any proof for the payment of the same in A.Y. 2016-17. Therefore, the submission of the assessee is not accepted. Therefore, the submission of the assesse that the undisclosed income as found in the seized material during the course of search is explained/considered in total income is not acceptable in the absence of documentary evidences in support of claim of the assessee. Therefore, undisclosed investment and interest income amounting to Rs. 40,58,965/- which was disclosed in the seized material found from the residence of Shri Hemant Garg is being treated as unexplained investment and unaccounted income of assessee for the year under consideration and the same is being added to the total income of the assessee u/s 69 of the I.T. Act, 1961 and to be taxed as per the provisions of section 115BBE and accordingly taxed as per the provisions of section 115BBE(1).” (Relevant APB 213-214)  Assessment order dated 16.07.2021 for A.Y. 2016-17 [APB 216- 236]: Printed from counselvise.com ITA No. 448/JPR/2025 M/S Royal Developers, Jaipur. 33 “However, the submission of the assesse is unacceptable for the following reasons: • The assesse has not furnished documentary evidences for his claim • The assessee has submitted that the source of investment in the Royal Developer was from the income offered for taxation for the year under consideration, but no evidence or day-to-day cash book has been produces from which it could be verified that the investment made in the Royal Developer was from the income offered for taxation • As per seized material the assessee has made investment in the four years, however he claimed that he has made total payment in the A.Y. 2016-17 out of the receipts from being sole selling agent of GP Tower and Trinetra Ganesh Smart Bazar. However, he has not submitted any proof for the payment of the same in A.Y. 2016-17. Therefore, the submission of the assessee is not accepted. Therefore, the submission of the assesse that the undisclosed income as found in the seized material during the course of search is explained/considered in total income is not acceptable in the absence of documentary evidences in support of claim of the assessee. Therefore, undisclosed investment and interest income amounting to Rs. 30,48,473/- which was found recorded in the seized material found from the residence of Shri Hemant Garg is being treated as unexplained investment and unaccounted income of assessee for the year under consideration and the same is being added to the total income of the assessee u/s 69 of the I.T. Act, 1961 and to be taxed as per the provisions of section 115BBE and accordingly taxed as per the provisions of section 115BBE(1).” (Relevant APB 234-235) From the perusal of the above orders, it is crystal clear that Shri Dharmendra Agarwal in his individual capacity and Shri Hemant Garg has already offered the amount mentioned in the seized papers identified by the ld. AO in the assessment order and all such figures are duly appearing in the fund flow statement submitted by Shri Printed from counselvise.com ITA No. 448/JPR/2025 M/S Royal Developers, Jaipur. 34 Dharmendra Agarwal (APB 51) and Shri Hemant Garg (APB 63) during the course of assessment proceedings. Therefore, it is a fact on record that the observations of the ld. AO in making the substantive addition in the case of other persons whose name are appearing in the concluding para are not in consonance with the said orders passed and moreover the amount offered by respective persons in their fund flow statement has also been accepted by the ld. AO. Any further addition on the same figures shall tantamount to double addition and double taxation thereon and deserves to be deleted. 3. Holding the amount invested by partners as loan: In this regard it is submitted that ld. AO while making the addition in the hands of assessee firm alleged the investment made in assessee firm as ‘Loan’ at page 7 of the Assessment Order. Extract of relevant para is reproduced as under for ready reference: “On perusal of above papers it is noticed that total part of interest andprincipleamount of Rs. 39360585/- is considered as undisclosed/unaccounted income in therespective financial years in the hand of M/s Royal Developers in the form of cash/cheque loans and interest payments.” Thus the action of ld. AO in making the addition by considering the capital contribution by Shri Dharmendra Agarwal as loan, despite the fact same has been clearly shown as capital contribution in assessee firm is against the law and deserves to be deleted. (Copy of Capital account of Dharmendra Agarwal in the books of accounts of Assessee firm is enclosed at APB 31). From the perusal of the above papers together with the balance sheet of the assessee firm, it is crystal clear that the amount appearing in the column of cheque in the seized record is duly mentioned in the financials filed with the department and is shown as capital, therefore no adverse inference can be drawn and the additions so made considering the entries as loan and interest thereon deserves to be deleted in entirety. 4. Chomu House project is owned by M/s Shree Ram Om Real Estate Pvt. Ltd.: Printed from counselvise.com ITA No. 448/JPR/2025 M/S Royal Developers, Jaipur. 35 The Chomu House Project is owned by M/s Shree Ram Om Real Estate Pvt. Ltd., however while completing the assessment, the ld. AO had made an addition pertaining to project Chomu House which is the project of some other entity i.e. M/s Shree Ram Om Real Estate Pvt. Ltd. in the hands of assessee firm, despite the fact thatassessee firm during the course of assessment has categorically mentioned that it has no relation with Chomu House Project. Further in support of its claim assesseehas submitted the copy of Financial Statement of M/s Shree Ram Om Real Estate Pvt. Lrd. and copy of collaboration agreement entered by M/s Shree Ram Om Real Estate Pvt. Lrd. with the owner of property (APB 66-101). On perusal of page No. 7 of Collaboration agreement (APB 78), it is evident that the M/s Shree Ram Om Real Estate Pvt. Ltd. agreed to pay Rs. 4.00 Crore to the owner which is appearing in Audited Financial Statement of M/s Shree Ram Om Real Estate Pvt. Ltd. as Short Term Loans & Advances in Note 12 (APB 64). Relevant Extract of same is reproduced as under: Further at Page No. 18 of Collaboration Agreement (APB 89), there is a Schedule-A, wherein complete Address of the Residential House for which Collaboration agreement has been signed is same as the property under consideration. Extract of Schedule A as in collaboration agreement is reproduced here under for ready reference: Printed from counselvise.com ITA No. 448/JPR/2025 M/S Royal Developers, Jaipur. 36 Beside this, as per detailed plan annexed to the agreement Project Name – Liviano, Chomu House, C- Scheme Jaipur is clearly stated (APB 94- 101). Thus on perusal of Collaboration agreement and Audited Financial Statement of M/s Shree Ram Om Real Estate Pvt. Ltd., it is clearly evident that Chomu House Project is owned by M/s Shree Ram Om Real Estate Pvt. Ltd. and has no relation with the assessee firm. Therefore the addition pertaining to ChomuHouse Project in the hands of assessee firm is against the law and deserves to be deleted. It is also submitted that all the aforesaid facts were submitted before the ld. AO who has also reproduced the relevant submission of the assessee at page 8 of the assessment order which reads as under: Investment in Chomu House and M/s Royal Developers The assessee is a partner in M/s Royal Developers, Jaipur alongwith Shri Om Prakash Gupta, Shri Rachit Agarwal, Smt. BinduChandela and M/s SarafBuildestate Developers Pvt. Ltd. through Shri Rambabu Agarwal. This firm was constituted on 15.10.2014. The assessee has 15% share in the firm. The firm entered into a joint venture agreement for development of a property at Sardar Patel Marg, Jaipur. In this firm, the assessee contributed Rs. 64,73,900/- which is duly recorded in the books of accounts. The brother of the assessee Shri Ashok Kumar Gupta is also a shareholder cum director in M/s Shree Ram Om Real Estate Pvt. Ltd. In this company a Development Agreement for a property at 34, ChomuKothi Printed from counselvise.com ITA No. 448/JPR/2025 M/S Royal Developers, Jaipur. 37 and Plot No. S-3 & S-4, Chomu House, Jaipur has been entered on 11.12.2013 with Shri Rao Surendra Pal Singh. In this company, Shri Ashok Kumar Gupta has contributed Rs. 1,27,83,473/- during F.Y. 2012-13 to 2014-15. It is also submitted that income tax department during the course of seizure of various document has seized certain documents which has been enclosed in the paper book at APB 18 & 19 which is the ledger account of Shri Ashok Kumar Gupta (brother of Shri Dharmendra Agarwal) in the books of M/s Shree Ram Om Real Estate Pvt. Ltd. wherein all the entries are appearing total of which comes to Rs. 1,23,30,000/- (APB 19) and the same figures is also appearing at APB 20 seized from the premises of Shri Hemant Garg wherein the investment in Chomu House project by cheque is Rs. 1,23,30,000/-. Therefore, it is beyond doubt and both the documents are part of seized record wherein the amount invested by cheque with precise dates is same at Rs. 1,23,30,000/- and is also clear that the investment is in M/s Shree Ram Om Real Estate Pvt. Ltd. therefore any adverse view taken by the ld. AO in the hands of the assessee firm for the transactions carried out in some other entity, deserves to be deleted in toto. 5. The seized record as referred by the ld. AO refers to sale of 1/3rd share of the total share of Shri Dharmendra Agarwal to Shri Hemant Garg: The ld. AO while reading the seized documents found from the possession of Shri Hemant Garg and marked as page 1 to 8 and enclosed at APB 11 to 22 has wrongly conceptualized the entries found noted as belonging to the assessee firm. To clarify, page-wise explanation of the seized documents are as under:  First Image at Page 3 of Assessment Order: Ld. AO has reproduced the seized page marked as Annexure ‘A’ Exhibit 4 Page 5 (APB 15).This page contains year wise investment by Shri Dharmendra Agarwal and family inChomu House Project owned byM/s Shree Ram Om Real Estate Pvt. Ltd. and calculation of Interest thereon calculated for the determining value of 1/3rd share of the total share of Shri Dharmendra Agarwal and family which was sold to Shri Hemant Garg (from whom possession such paper were seized). It is also relevant tostate that entire transaction are summarized at Annexure A Exhibit 4 Page 4 (APB 14) and same is reproduced at page 5 of Assessment Order (second image).  First Image at Page 4 of Assessment Order: Printed from counselvise.com ITA No. 448/JPR/2025 M/S Royal Developers, Jaipur. 38 Ld. AO has reproduced the seized page at Annexure ‘A’ Exhibit 4 Page 2(APB 12). This page contains year wise investment of Shri Dharmendra Agarwal (Partner of Assessee firm) in cash and chequeand calculation of interest thereon calculated for determining value of 1/3rdshare of the total shares of Shri Dharmendra Agarwal which was sold to Shri Hemant Garg (from whom possession such paper were seized). It is also relevant to state that entire transaction are summarized at Annexure A Exhibit 4 Page 4 (APB 14) and same is reproduced at page 5 of Assessment Order (Second Image).  Second Image at Page 4 of Assessment Order: Ld. AO has reproduced the seized page at Annexure ‘A’ Exhibit 4 Page 8(APB 20). This page contains date wise investment of Shri Dharmendra Agarwal and family inChomu House Project owned by the M/s Shree Ram Om Real Estate Pvt. Ltd. It is also relevant tostate that entire transaction are summarized at Annexure A Exhibit 4 Page 4 (APB 14) and same is reproduced at page 5 of Assessment Order. Further the seized pages placed at APB 18 & 19 duly matches with the entries found at APB 20 and relates to M/s Shree Ram Om Real Estate Pvt. Ltd.  First Image at Page 5 of Assessment Order Ld. AO has reproduced the seized page at Annexure ‘A’ Exhibit 4 Page 1(APB 11). This page contains year wise investment of Shri Dharmendra Agarwal and family inChomu House Project owned by the M/s Shree Ram Om Real Estate Pvt. Ltd. and calculation of Interest thereon calculated for the determining value of 1/3rd share of the total shares of Shri Dharmendra Agarwal and family which was sold to Shri Hemant Garg (from whom possession such paper were seized). It is also relevant tostate that entire transaction are summarized at Annexure A Exhibit 4 Page 4 (APB 14) and same is reproduced at page 5 of Assessment Order.  Second Image at Page 5 of Assessment Order Ld. AO has reproduced the seized page at Annexure ‘A’ Exhibit 4 Page 4(APB 14). This page contains summary of investment of Shri Dharmendra Agarwal and famly inChomu House Project owned by the M/s Shree Ram Om Real Estate Pvt. Ltd. &assessee firm. It is submitted that entire working is done to determine value of 1/3rd share of the total shares of Shri Dharmendra Agarwal which was sold to Shri Hemant Garg (from whom possession such paper were seized). Printed from counselvise.com ITA No. 448/JPR/2025 M/S Royal Developers, Jaipur. 39 To further co-relate the papers found during the course of search and marked as Annexure ‘A’ Exhibit 4 page 1 to 5 (APB-11-16), it is submitted that page 4 is a summary page of all the other pages and its co-relation is as under: Entries related to Chomu House Project owned by M/s Shree Ram Om Real Estate Pvt. Ltd. appearing at Annexure A Exhibit 4 page 4 (APB 14): 1. Cheque entry of Rs. 1,23,30,000/- It is sum total of entries appearing at Annexure A Exhibit 4 page 3 (APB 13) wherein total of F.Y. 2012-13 is Rs. 1,25,10,000/- adding therein the entries of F.Y. 2013-14 i.e. Rs. 30,20,000/-, 7,00,000/-, 19,00,000/-, 30,00,000/- & 6,00,000/- and reducing therefrom entries of Rs. 30,00,000/-, 30,00,000/- & 34,00,000/-. The aforesaid entries are also appearing at Annexure A Exhibit 4 Page 8 (APB20). 2. Cheque interest of Rs. 87,62,576/- It is sum total of entries appearing at Annexure A Exhibit 4 page 3(APB 13) wherein total of F.Y. 2012-13 is Rs. 14,39,634/- adding therein the total of entries of F.Y. 2013-14 i.e. Rs. 31,04,518/- and reducing therefrom total of negative entries of Rs. 4,40,134/- further adding entries appearing at Annexure A Exhibit 4 page 1 wherein total of F.Y. 2014-15 is Rs. 25,63,707/- and further adding entries appearing at Annexure A Exhibit 4 page 1(APB-11) wherein total of F.Y. 2015-16 is Rs. 20,94,851/-. 3. Cash entry of Rs. 80,21,500/- It is sum total of entries appearing at Annexure A Exhibit 4 page 5 (APB 15) wherein total of F.Y. 2012-13 is Rs. 11,20,000/- adding therein the entries of F.Y. 2013-14 i.e. Rs. 72,000/- and thereafter adding entries of F.Y. 2014-15 of Rs. 2,79,000/-, 5,00,000/-, 5,00,500/-, 10,00,000/-, 5,00,000/-, 25,00,000/- and thereafter adding entries appearing at Annexure A Exhibit 4 backside of page 5(APB 16) of Rs. 15,50,000/-. The aforesaid entries are also appearing at Annexure A Exhibit 4 Page 8 (APB 20). 4. Interest entry of Rs. 12,56,420/- It is sum total of entries appearing at Annexure A Exhibit 4 page 5 (APB 15) wherein total of F.Y. 2012-13 is Rs. 90,266/- adding therein the total of entries of F.Y. 2013-14 i.e. Rs. 1,50,984/- and thereafter adding total of entries of F.Y. 2014-15 i.e. of Rs. 3,47,512/- and thereafter adding entries appearing at Annexure A Exhibit 4 backside of page 5(APB 16) of Rs. 6,67,658/- related to F.Y. 2015-16. Printed from counselvise.com ITA No. 448/JPR/2025 M/S Royal Developers, Jaipur. 40 Entries related to Royal Developers appearing at Annexure A Exhibit 4 page 4 (APB 14): 1. Cheque entry of Rs. 64,73,900/- It is sum total of entries appearing at Annexure A Exhibit 4 page 2 (APB 12)of Rs. 33,07,500/- and Rs. 31,66,400/-. The other entries mentioned therein are the balances carried forward in next year which exactly tally with the total already taken. 2. Interest entry of Rs. 8,54,568/- It is sum total of entries appearing at Annexure A Exhibit 4 page 2(APB 12) of Rs. 1,76,702/- and Rs. 6,77,866/-. The other entries mentioned therein are the balances carried forward in next year which exactly tally with the total already taken. 3. Cash entry of Rs. 15,78,900/- It is sum total of entries appearing at Annexure A Exhibit 4 page 2(APB 12) of Rs. 2,86,900/- for the F.Y. 2014-15 and adding therein the entries of F.Y. 2015-16 of Rs. 28,000/- and Rs. 12,64,000/-. The other entries mentioned therein are the balances carried forward in next year which exactly tally with the total already taken. 4. Interest entry of Rs. 87,923/- It is sum total of entries appearing at Annexure A Exhibit 4 page 2(APB 12) of Rs. 7,080/- for the F.Y. 2014-15 and adding therein the entries of F.Y. 2015-16 of Rs. 80,843/-. Entry of Rs. 97,77,726/- It is sum total of entries appearing at Annexure A Exhibit 4 backside of page 5(APB 16) of Rs. 95,00,000/- and interest of Rs. 2,77,726/-. The said entries are also appearing in the seized record placed at APB 22. Further, it is also submitted that aforesaid seized paper were seized from Shri Hemant Garg from his residential premises at 8, Indra Colony, Civil Lines, SawaiMadhopur and from the perusal of the statement recorded during search, it appears that there is no specific query with respect to the papers mentioned in the assessment order. Further from the perusal of the assessment order, it transpires that there is nothing adverse in the statements recorded as ld. AO has not referred to any such statement. Although, at the time of assessment proceedings, such seized papers were confronted to Shri Dharmendra Agarwal as well as Shri Hemant Garg who owned the transaction noted in such seized papers in their individual capacity. Therefore, no adverse inference should be drawn in the case of Printed from counselvise.com ITA No. 448/JPR/2025 M/S Royal Developers, Jaipur. 41 assessee firm for the additions made which deserves to be deleted in the entirety. 6. Totaling Error While Placing the figures in the Table It is submitted that there are certain typographical / arithmetical error while formulating table in page no. 6 & 11 of ofA.Y. 2015-16, which is re-casted as under for ready reference: Tables at Pg. 6 of Assessment Order of A.Y. 2015-16. Royal Developers F.Y. Cheque Cash Total Principal (1) Interest (2) Principal (3) Interest (4) Principal (5=1+3) Interest (6=2+4) 2014- 15 33,07,500 1,76,702 2,86,900 7,080 35,94,400 1,83,782 2015- 16 31,66,400 6,77,866 12,92,000 80,843 44,58,400 7,58,709 Total 64,73,900 8,54,568 15,78,900 87,923 80,52,800 9,42,491 Chomu House F.Y. Cheque Cash Total Principal (7) Interest (8) Principal (9) Interest (10) Principal (11=7+9) Interest (12=8+10) 2012-13 1,25,10,000 14,39,634 11,20,000 90,266 1,36,20,000 15,29,900 2013-14 92,20,000 26,64,384 72,000 1,50,984 92,72,000 28,15,368 2014-15 (94,00,000) 25,63,707 52,79,500 3,47,512 (41,20,500) 29,11,219 Sub Total 1,23,30,000 66,67,725 64,71,500 5,88,762 1,87,71,500 72,56,487 2015-16 - 20,94,851 15,50,000 6,67,658 15,50,000 27,62,509 Total 1,23,30,000 87,62,576 80,21,500 12,56,42 0 2,03,21,500 1,00,18,996 Tables at Pg. 11 of Assessment Order of A.Y. 2015-16 A.Y. Principal (13=5+11) Interest (14=6+12) Total (15=13+14) 2013-14 1,36,20,000 15,29,900 1,51,49,900 2014-15 92,72,000 28,15,368 1,20,87,368 2015-16 (5,26,100) 30,95,001 25,68,901 Total 2,23,65,900 74,40,629 2,98,06,169 On account of Totaling error there is excess addition of Rs. 4,08,996/- (Rs. 3,02,15,165/- - Rs. 2,98,06,169/-) which deserves to be deleted. Printed from counselvise.com ITA No. 448/JPR/2025 M/S Royal Developers, Jaipur. 42 In view of above, it is submitted that additions made in the case of assessee firm on the basis of documents found and seized from Shri Hemant Garg at his residential premises deserve to be deleted as: 1. Transaction Noted in seized paper are not entered into by assessee firm and none of the partners have stated that such transaction are under taken by the assessee firm. 2. Factually two independent person had entered into mutual agreement wherein one party i.e. Shri Dharmendra Agarwalhassold 1/3rdof his share in two projects i.e.Chomu House & Royal Developers to another party i.e. Shri Hemant Garg. 3. It is also relevant to statement that ld. AO has never doubted the factual position, however ld. AO grossly erred in making protective addition in the hands of assessee firm despite the fact that parties in which substantive addition is made i.e. Shri Dharmendra Agarwal & Shri Hemant Garg, had already offered the additional income in their respective fund flow statement. Thus once the substantive addition is confirmed and not challenged subsequently than there is no question of protective addition in the hands of assessee firm. 4. In alternative, ld. AO further grossly erred in making addition of entries pertaining to A.Y. 2013-14 & A.Y. 2014-15 in the hands of assessee firm in A.Y. 2015-16 despite the fact that assessee firm was non- existent during those assessment year. 5. Further, Ld. AO also erred in making the addition of Chomu House Project which is owned by M/s Shree Ram Om Real Estate Pvt. Ltd in the hands of assessee firm who has no relation with such entity amounting to Rs.2,60,27,987/-. 6. It is also submitted that addition has been made by ld.AO without confronting the assessee firm and recording their statement in regard to the transaction found noted on the seized papers and has summarily rejected the submission filed by the assessee firm. 7. It is also submitted that while completing the assessment ld. AO also erred in making the addition of Investment made by Shri Dharmendra Agarwal in assessee firm through Banking Channels which is duly Printed from counselvise.com ITA No. 448/JPR/2025 M/S Royal Developers, Jaipur. 43 recorded in the books of accounts of assessee firm. Copy of Financial Statement along with Dharmendra Agarwal Capital Account in the books of assessee firm are enclosed. (APB 31). In the circumstances it is submitted that the Ld. CIT(A) after duly considering the submission of the assessee firm deleted the entire additions in the hands of assessee firm by making following observation— “The contention of the appellant is prima-facie correct. This also gets corroborated with the fact that no substantive addition has been made in hands of any assessee by the learned AO with respect to the interest with respect to the capital in cheque and interest with respect to investment in cash. Transaction Noted in seized paper are not entered into by assessee firm and none of the partners have stated that such transaction are under taken by the assessee firm. Two independent persons – one being the partner of appellant firm, had entered into mutual agreement wherein one party i.e. Shri Dharmendra Agarwal has sold 1/3rd of his and his brother share in twoprojects i.e. Chomu House & Royal Developers to another party i.e. Shri Hemant Garg. Ld. AO has not doubted the factual position. Sh. Dharmendra Kumar Agarwal has given 1/3rd of his share in the appellant firm M/s Royal Developers and 1/3rd share of his brother Shri Ashok Kumar Gupta in M/s Shree Ram Om Real Estate Pvt. Ltd. to Shri Hemant Garg and total part of unexplained principle and interest amount came to Rs.3,93,60,585/-. The flow of the figures in the seized documents as extracted in the assessment order also show that the interest figures have been calculated on a notional basis to arrive at the amount payable or receivable between the individuals Sh. Dharmendra Kumar Agarwal and Shri Hemant Garg. No income has been earned by the appellant in this regard. Further in this regard no substantive addition has been made by the learned AO with respect to the corresponding protective addition made in the hands of the appellant. In view of this discussion the protective addition does not survive.” Thus looking into facts & circumstances of the case, it is submitted that details found & seized during the course of search on the basis of which protective additions are made in the hands of assessee firms, in actual pertains to Shri Dharmendra Agarwal & Shri Hemant Garg, in whose hands amount has already been offered as per deal of 1/3rd share of Shri Dharmendra Agarwal. Therefore appeal of department deserves to be dismissed.” Printed from counselvise.com ITA No. 448/JPR/2025 M/S Royal Developers, Jaipur. 44 7. To support the contention raised in the written submission ld. AR of the assessee filed a detailed paper book. The index of the paper book so filed reads as under:- S. No. PARTICULARS PAGE NO. 1. Copy of Acknowledgement of Return of Income and computation of Income filed u/s 153A 01-03 2. Copy of Financial Statement for the year ended 31.03.2015 04-06 3. Copy of notice dated 05.02.2021 issued under section 142(1) of the Income Tax Act ,1961 07 4. Copy of reply referring notice no. ITBA/AST/F/142(1)/2020- 21/1030409105(1) u/s 153A 08-10 5. Copy of Annexure AS Exhibit 4 Page No. 1 to 8 11-22 6. Copy of PAN of assessee firm 23 7. Copy of Partnership deed of assessee firm 24-30 8. Copy of Capital A/c of Dharmendra Kumar Agrawal in the books of accounts of assessee firm. 31 9. Copy of Show cause reply filed in the case of Dharmendra Kumar Agrawal along with fund flow statement. 32-51 10. Copy of Show cause reply dated 22.04.2021 filed in the case of Hemant Garg along with fund flow statement. 52-63 11. Copy of Financial statement of M/s Shree Ram Om Real Estate Private Limited for the year ended on March31, 2016. 64-65 12. Copy of Collaboration Agreement/Developers Agreement executed by M/s Shree Ram Om Real Estate Private Limited 66-101 13. Copy of Assessment order of Dharmendrakumar Agrawal for the A.Y 2013-14, 2014-15 ,2015-2016 and 2016-17 102-162 14. Copy of Assessment order of Hemant Garg for the A.Y 2013-14, 2014-15 ,2015-2016 and 2016-17 163-236 15. Copy of Assessment order of Om Prakash Gupta for the A.Y 2013-14, 2014-15 ,2015-2016 and 2016-17 237-338 16. Copy of Assessment order of Rachit Agrawal for the A.Y 2013-14, 2014-15 ,2015-2016 and 2016-17 339-346 17. Copy of Written Submission dated 22.11.2024 filed before CIT(A) 347-355 Printed from counselvise.com ITA No. 448/JPR/2025 M/S Royal Developers, Jaipur. 45 S. No. PARTICULARS PAGE NO. 18. Copy of Written Submission dated 25.11.2024 filed before CIT(A) 356-371 8. In addition to the written submission so filed the ld. AR of the assessee vehemently argued that the loose paper so found relates to the deal that has happened for the sale of share of the firm by independent parties and the firm has nothing to do with that deal. He submitted that figures mentioned at page 20 of the paper book were matching with that of the paper book page 14 being the figure of cash. The page 11 being the another summary tallied with the page 14 of the paper book being the same seized material. The amount written at page 14 of the paper book being the copy of seized material and the figure mentioned in that page get also tallied with the overall disclosure made by Shri Hemant Garg and that facts has not been disputed by the revenue. Based on that argument he supported the finding recorded in the order of the ld. CIT(A) Printed from counselvise.com ITA No. 448/JPR/2025 M/S Royal Developers, Jaipur. 46 9. We have heard both the parties perused the materials available on record and gone through the orders of the lower authority. The bench noted that though revenue has raised effectively three grounds of appeal, but all the grounds relates to the direction of the ld. CIT(A) in deleting the addition of Rs. 3,02,15,165/- made by the ld. AO based on the incriminating material seized during the search. The brief facts relating to the dispute on hand are that there was action as per provision of section 132(1) of the Act on 16.01.2019 at the various premises of Om Agarwal Group. The assessee firm derives income from business or profession during the year under consideration. Consequent to that search action, the case of the assessee firm was centralized and thereby notice as per provision of section 153A of the Act was started. In response the assessee firm furnished Return of Income on 20-08- 2020 declaring total income at Rs. NIL/-. Statutory notice as required under the law was issued and thereby the assessee filed the details and submission as called for. The assessee firm derives income from business or profession during the year under consideration. Printed from counselvise.com ITA No. 448/JPR/2025 M/S Royal Developers, Jaipur. 47 Ld. AO after considering the submission noted that while search at the residence of Shri Hemant Garg situated at 8, Indra Colony Civil Line Road, Sawai Madhopur various incriminating documents were found & seized from the residence of Shri Hemant Garg. Out of those papers some loose papers were found and seized as exhibit No.4. It was alleged that this exhibit records the transactions relating to cash and other advances taken and interest payments by the firm M/s Royal Developers to various persons including Shri Hemant Garg. The handwriting on these pages was of Shri Kapil Jain; accountant of M/s Ranthambhore Regency Hotel. Pages 1 to 8 are related to details of cash and cheque loans and interest payments by M/s Royal Developers for project Chomu House and Royal developers. Ld. AO noticed that M/s Royal Developers is partnerships Firm, situated at Jaipur and Shri Om Prakash Agarwal (Gupta), Shri Rachit Agarwal, Shri Dharmendra Agarwal, Shri Bindu Chandela are partners of the assessee firm. Perusal of these papers reveals that it records year wise principal and interest amount and thereby the same were distributed in equal three parts. From these papers it was inferred that Shri Hemant Garg Printed from counselvise.com ITA No. 448/JPR/2025 M/S Royal Developers, Jaipur. 48 received an amount of Rs.1,31,21,928/- as principal and interest amount from Royal Developers and Chomu House Project. Based on that set of facts ld. AO further inferred that other two parties had also given loan and advances to M/s Royal Developers in the cash as well as cheque mode and also received interest on these advances. Based on that seized material ld. AO prepared the year wise bifurcation of cash & cheque advances taken by respective firms/projects and interest received thereon were tabulated as under:- Royal Developers F.Y. Principle Amount (Cheque) Interest Cheque Principle amount (cash) Interest Cash Total Principle Interest 2014-15 3307500 384198 286900 7080 3594400 391278 2015-16 3166400 293668 1292000 80843 4458400 374511 Total 6473900 677866 1578900 87923 8052800 765789 Chomu House Total F.Y. Principle Amount (Cheque) Interest Cheque Principle amount (cash) Interest Cash Principle Interest 2012-13 12500000 1439634 1120000 90266 13620000 1529900 2013-14 9200000 2664384 72000 150984 72000 2815368 2014-15 Less 9400000 2564707 5279500 347512 5279500 2912219 Printed from counselvise.com ITA No. 448/JPR/2025 M/S Royal Developers, Jaipur. 49 2015-16 Balance 12330000 2094851 1550000 667658 13880000 2762509 Total 12330000 8762576 8021500 1256520 20351500 9277920 Considering that calculation it was noticed by the ld. AO that total part of interest and principal amount comes to Rs. 3,93,60,585/- and the same was considered as undisclosed / unaccounted income in the respective financial years in the hand of M/s Royal Developers in the form of cash/cheque loans and interest payments as tabulated herein below: A.Y. Principle Interest Total 2013-14 13620000 1529900 15149900 2014-15 72000 2816368 2888368 2015-16 8873900 3302997 12176897 2016-17 6008400 3137020 9145520 Total 39360585 While assessment proceedings ld. AO specifically asked for the explanation of the undisclosed / unaccounted receipts, vide query letter dated 05.02.2021. The assessee submitted his reply/submission on 16.04.2021. Where in it was contended that while search action at the residential premises of Shri Hemant Garg on 16.1.2019 at 8, Indra Colony, Civil Lines, Sawai Madhopur various loose papers and documents were found and seized which Printed from counselvise.com ITA No. 448/JPR/2025 M/S Royal Developers, Jaipur. 50 includes pages Nos. 1 to 5 of Exhibit 4 of Annexure AS prepared at the said premises. These papers contained certain transactions carried out between Shri Dharmendra Kumar Agarwal, partner of assessee firm and Shri Hemant Garg (from whom possession of the said papers were found). As per these papers certain calculations were found noted with respect to the purchase of 1/3rd of share of Shri Dharmendra Kumar Agarwal in the partnership firm M/s Royal Developers and the Chomu House project. The papers contained the entries for F.Y. 2012-13 to 2015-16. Shri Dharmendra Agarwal while working out the additional undisclosed income for the block period has offered substantial amount on the investment made in the assessee firm and in Chomu House Project. The brief contention raised in the case of Shri Dharmendra Agarwal was that; [ as found recorded in the assessment order ] ; Further Shri Hemant Garg also accepted the investment made by him on account of purchase of 1/3rd share of the total investment made by Shri Dharmendra Agarwal in the assessee firm as well as in Chomu House Project and offered a sum of Rs. 1,31,21,928/- as unexplained investment in the said project and claimed application of the same out of the undisclosed income declared for the A.Y. 2016-17 when he had actually made the payment to Shri Dharmendra Agarwal towards the investment by him in earlier years. It was thus submitted that since the papers under reference are related to the transactions carried out between Shri Dharmendra Agarwal and Shri Hemant Garg and assessee firm has no relevance with the said papers, therefore, no adverse inference in the hands of Printed from counselvise.com ITA No. 448/JPR/2025 M/S Royal Developers, Jaipur. 51 the assessee firm is called for in this regard more particularly when the parties related to these papers i.e. Shri Dharmendra Agarwal and Shri Hemant Garg has categorically accepted these transactions as their undisclosed income / investment and paid the taxes thereon and any adverse inference in the hands of the assessee firm, if called for, the same would be double taxation of an income firstly in the hands of Shri Dharmendra Agarwal and Shri Hemant Garg and secondly in the hands of the assessee firm.\" The above submission made in the case of the assessee firm was not considered by the ld. AO because the assessee has submitted that the papers under reference are related to the transaction carried out between Shri Dharmendra Agarwal and Shri Hemant Garg and assessee firm has no relevance with the said papers. That explanation was not considered as acceptable because Shri Dharmendra Agarwal, partner of the firm himself admitted the above transaction and offered income for taxation on the basis of these seized papers. Further, Shri Hemant Garg, from whose possession the documents were seized, has also considered these papers while computing his undisclosed income. The offer of income based on these papers is evidence that these papers contain the actual transactions related to the advances received by the firm. The transactions contain both cheque and cash, however the assessee has not furnished the explanation for these advances as well as source of interest expenses. The total Printed from counselvise.com ITA No. 448/JPR/2025 M/S Royal Developers, Jaipur. 52 of all the transactions comes to Rs. 3,93,60,585/- the one third part of it i.e, approximate 1,31,21,928/- has been offered by Shri Dharmendra Agarwal and Shri Hemant Garg. Since the assessee has not disclosed the name of two other persons, as all the figures are divided in three persons it was assumed that the other two persons sharing this calculation would be Shri Om Prakash Gupta and Shri Rachit Agarwal, who are also partners in the firm and thereby it was presumed that the assessee firm has received total amount of Rs. 3,93,60,585 during the period of four-year i.e. A.Y. 2013-14 to A.Y. 2016-17. Since, the assessee has not furnished justified reply for the explanation of the same and therefore, the same was added by the ld. AO on protective basis. Record reveals that during the A.Y. 2013-14 and A.Y. 2014- 15 firm was not in existence therefore, amount of Rs. 3,02,15,165/- (Principle 22565900/- + Rs. 7649265/-) for these years was considered in the A.Y. 2015-16, as these funds have been invested by the assessee firm in its projects as tabulated herein below: A.Y. Principle Interest Total Printed from counselvise.com ITA No. 448/JPR/2025 M/S Royal Developers, Jaipur. 53 2013-14 13620000 1529900 15149900 2014-15 7200 2816368 2888368 2015-16 8873900 3302997 12176897 22565900 7649265 30215165 While holding so ld. AO made the said amount of Rs. 3,02,15,165/- in the hands of the firm as protective income and he choose to tax the substantive addition in the hands of the partners Shri Dharmendra Agarwal, Shri Om Prakash Gupta and Shri Rachit Agarwal in the respective years. When the matter was challenged before the ld. CIT(A), he has deleted that protective addition made in the case of the assessee firm by examining all the aspects of the matter. Revenue aggrieved with that finding of the ld. CIT(A) challenged that finding before this tribunal. Having considered the facts, orders of the lower authority and submission advanced before us we note that the apple of discord is based on pages Nos. 1 to 5 of Exhibit 4 of Annexure AS prepared at the time of search at the premises of Shri Hemant Garg. As contended and accepted that paper contains the deal of Printed from counselvise.com ITA No. 448/JPR/2025 M/S Royal Developers, Jaipur. 54 purchase of share of the assessee firm between Shri Dharmendra Kumar and Shri Hemant Garg and this contention were accepted by them and were assessed as such. In consideration of that the ld. AO choose to tax that amount on protective basis and preferred to tax the amount on substantive basis in the hands of Shri Dharmendra Agarwal, Shri Om Prakash Gupta and Shri Rachit Agarwal. The fact that there was a transaction for one third share sale between Shri Dharmendra Agarwal and Shri Hemant Garg of the impugned property is evident from the following evidence placed on record in the paper book; Copy of Collaboration Agreement/Developers Agreement executed by M/s Shree Ram Om Real Estate Private Limited 66-101 Copy of Assessment order of Dharmendrakumar Agrawal for the A.Y 2013-14, 2014-15 ,2015-2016 and 2016-17 102-162 Copy of Assessment order of Hemant Garg for the A.Y 2013- 14, 2014-15 ,2015-2016 and 2016-17 163-236 Ld. DR in support of the contention raised in the grounds of appeal did not place on record anything contrary as to why the protective addition made in the case of the assessee be sustained in the hands of the assessee firm when the ld. AO choose to tax above transaction only in the hands of Shri Dharmendra Agarwal. Having observed to tax that amount here on protective basis ld. Printed from counselvise.com ITA No. 448/JPR/2025 M/S Royal Developers, Jaipur. 55 AO has not taxed any amount in the hands of Shri Om Prakash Gupta and Shri Rachit Agarwal as is evident from the paper book page 237 to 346 being the assessment orders of those two partners of the firm. Be that it may so ld. AO has accepted the fact that the transaction was for the purpose of making valuation of the share of the firm and for that transaction whatever cheque transaction was there it was accepted, and the only cash part was taxed in the hands of both the parties i.e. Shri Dharmendra Kumar Agarwal and Shri Hemant Garg. Thus, we see no reason to sustain the protective addition made in the hands of the assessee firm. The bench also noted that the cash investment in the firm Royal Developers and project Chomu House, Shri Dharmendra Agarwal has offered investment made in cash for Rs.96,00,400/- and Rs. 36,48,248/- on account of interest received from Shri Hemant Garg. On the perusal of assessment orders of Shri Dharmendra Kumar Agarwal, it has been noticed that issue of investment by Shri Dharmendra Kumar Agarwal has been discussed by his Id. AO in the assessment order as under:- Dharmendra Kumar Agarwal A.Y. Particulars Page No. of assessment order Addition Printed from counselvise.com ITA No. 448/JPR/2025 M/S Royal Developers, Jaipur. 56 2013-14 Undisclosed investment in project chomu House 2 to 5 11,20,000 2014-15 Undisclosed investment in project chomu House 2 to 5 72,000 2015-16 Undisclosed investment in Chomu House/Royal Developers (Rs. 5279500/- for investment in Chomu House) (Rs. 286900/- for investment in Royal Developers) 6 to 10 55,66,400 2016-17 Undisclosed investment in Chomu House/Royal Developers (Rs. 1550000/- for investment in Chomu House) (Rs. 1292000/- for investment in Royal Developers) 31 to 35 28,42,000 2016-17 Income offered for taxation during course of assessment proceedings on account of interest received from Hemant Garg 27 to 31 36,48,248 Total 132,48,648 On perusal of the assessment order passed in the case of Shri Hemant Garg, as produced as part of paper book it has been noticed that Id. AO has made addition in the hands of Dharmendra Kumar Agarwal with respect to investment in Chomu House -and- Royal Developers. The same is tabulated as under:- Hemant Garg A.Y. Particulars Addition Page No. of Asst. Order 2013- 14 Addition on account of unexplained advances and interest receipts in firm M/s Royal Developers 5049966 2 to 9 2014- 15 Addition on account of unexplained advances and interest receipts in firm M/s Royal Developers 962789 2 to 9 2015- 16 Addition on account of unexplained advances and interest receipts in 4058965 5 to 12 Printed from counselvise.com ITA No. 448/JPR/2025 M/S Royal Developers, Jaipur. 57 firm M/s Royal Developers 2016- 17 Addition on account of unexplained advances and interest receipts in firm M/s Royal Developers 3048473 13 to 20 The assessee explained that that M/s Shreeram Om Real Estate Pvt Ltd, a Private Limited company and the project Chomu Kothi was being developed by it. In support of that claim a copy of development agreement executed between Shri Rao Surendra Pal Singh, the owner, and M/s Shreeram Om Real Estate Pvt Ltd., the developer for the development of property at 34, Chomu Kothi and Plot No. S-3 & S-4 placed on record. This fact was further confirmed with the ledger account of Ashok Kumar Gupta in the books of Shree Ram Om Real Estate Pvt. Ltd. and on perusal of same it has been noticed that an amount of Rs. 1,23,30,000/- has been shown as receipt from Shri Ashok Kumar Gupta. The Id. AO has worked out the unexplained investment in the project Chomu House of Rs. 1,23,30,000/- by way of cheque. Considering that facts stated in the development agreement furnished by the assessee-appellant, that the project \"Chomu Kothi belongs to Shri Rao Surendra Pal Singh and M/s Shree Ram Om Real Estate Pvt. Ltd. Based on the two different tables on page 6 of the Printed from counselvise.com ITA No. 448/JPR/2025 M/S Royal Developers, Jaipur. 58 assessment order prepared by the ld. AO for which first for cheque and second for cash advances taken by Royal Developers and another for cheque and cash advances taken for Chomu House project. Record also reveals that that the Chomu House project is being owned by M/s Shree Ram Om Real Estate Pvt. Ltd. and in support of same the assessee-appellant has furnished collaboration agreement, the schedule A of which contains detail about Chomu Kothi and Plot No. S-3 and S-4 being part of the collaboration agreement between M/s Shree Ram Om Real Estate Pvt. Ltd. and Rao Surendra Pal Singh the owner of the land. The assessee-appellant has furnished the ledger of Shri Ashok Kumar Gupta stating that the said amount of Rs.1,23,30,000/- as worked out by Id. AO is found recorded in the books of M/s Shree Ram Om Real Estate Pvt. Ltd as per ledger produced by the assessee- appellant. Thus, it is evident that transactions of Chomu House project can in no way be belonging to the assessee-appellant firm M/s Royal Developers and no addition is liable to be sustained in the hands of the assessee-appellant and that too on protective basis. Therefore, we are of the considered view that that the action of the ld. CIT(A) in directing to delete that amount was in Printed from counselvise.com ITA No. 448/JPR/2025 M/S Royal Developers, Jaipur. 59 appropriate understanding on the facts and there being no contrary material placed on record by the revenue and thereby we see no reasons to interfere in the action of the ld. CIT(A) directing the ld. AO to delete protective addition made in the hands of the assessee firm. We also take note from the facts on record that while completing the assessment of the assessee firm Id. AO also erred in making the addition of Investment made by Shri Dharmendra Agarwal in assessee firm through Banking Channels which is duly recorded in the books of accounts of assessee firm. Copy of Financial Statements along with Dharmendra Agarwal Capital Account in the books of assessee firm were filed. On perusal of the capital account of M/s Royal Developers furnished as part of paper book, it has been noticed that Shri Dharmendra Agarwal hold 15% of share in the said firm and his capital investment in the said firm was as under:- Date Capital Remarks Balance as on 31.03.2015 33,07,500 Balance as on 31.03.2016 64,73,900 Addition of Rs. 31,66,400 to the capital during the year FY 2016-17 Printed from counselvise.com ITA No. 448/JPR/2025 M/S Royal Developers, Jaipur. 60 Thus, it is clear from the record that the amount which was found recorded in seized papers which has been treated as advance/loan is capital contribution by Shri Dharmendra Agarwal in the assessee-appellant firm and thereby the action of the ld. AO while working out the unexplained investment in the firm considering these amounts is also not correct because as per the capital account ledger submitted Rs. 31,66,400 is through banking channel RTGS and duly reflected. We also take note of the fact that no substantive addition has been made by the learned AO in this regard in the hands of any of the partners to that extent of the capital. Therefore, the addition made in the hands of the assessee- appellant with respect to the capital contribution by the partners as recorded in the books of accounts of the appellant firm were rightly directed to be deleted by the ld. CIT(A) and we do not found any infirmity in that findings also. Considering the facts as discussed we note that the ld. AO has not made substantive addition for (i) principal amount in cheque, (ii) interest amount in cheque, (iii) interest amount in cash. While the issue of principal amount in cheque has been discussed in the earlier paragraphs also and since the same already recorded Printed from counselvise.com ITA No. 448/JPR/2025 M/S Royal Developers, Jaipur. 61 in the books of accounts, in the facts of the case, the question of addition in this regard does not arise. The transaction having been accepted by the ld. AO between the two parties and he choose not to make any addition on substantive basis in the hands of other two parties as discussed in the assessment order shows that he has indirectly accepted the fact that the transaction recorded in the seized documents found from the possession of Shri Hemant Garg and marked as page 1 to 8 and enclosed at APB 11 to 22 has wrongly conceptualized the entries found noted as belonging to the assessee firm. The ld. CIT(A) has in detailed discussed his finding on all the five pages found and there is no contrary material brought on record and therefore, even otherwise on the merits of the dispute we see no reason to interfere with the finding so recorded in the order of the ld. CIT(A). We also note that the ld. CIT(A) noted that the contention of the assessee firm is correct because the same was corroborated with the fact that no substantive addition has been made in hands of any assessee by the learned AO with respect to the interest with respect to the capital in cheque and interest with respect to investment in cash. Transaction Noted in seized paper are not entered into by Printed from counselvise.com ITA No. 448/JPR/2025 M/S Royal Developers, Jaipur. 62 assessee firm and none of the partners have stated that such transactions are under taken by the assessee firm. Two independent persons being the partner of appellant firm, had entered into mutual agreement wherein one party i.e. Shri Dharmendra Agarwal has sold 1/3rd of his and his brother share in two projects i.e. Chomu House & Royal Developers to another party i.e. Shri Hemant Garg. Ld. AO has not doubted the factual position and thereby assessed Shri Dharmendra Kumar Agarwal on 1/3rd of his share in the appellant firm M/s Royal Developers and 1/3rd share of his brother Shri Ashok Kumar Gupta in M/s Shree Ram Om Real Estate Pvt. Ltd. to Shri Hemant Garg and total part of unexplained principle and interest amount came to Rs.3,93,60,585/-. The flow of the figures in the seized documents as extracted in the assessment order also shows that the interest figures have been calculated on a notional basis to arrive at the amount payable or receivable between Shri Dharmendra Kumar Agarwal and Shri Hemant Garg. No income has been earned by the appellant in this regard as the transaction was between Shri Dharmendra Kumar Agarwal and Shri Hemant Garg. Further in this regard no substantive addition has been made by the learned AO Printed from counselvise.com ITA No. 448/JPR/2025 M/S Royal Developers, Jaipur. 63 with respect to the corresponding protective addition made in the hands of the appellant. In view of this discussion the protective addition does not survive. Based on these observations we see no merits in the grounds raised by the revenue and thereby the same are dismissed. In the result, the appeal of the Revenue is dismissed. Order pronounced in the open Court on 15/10/2025. Sd/- Sd/- ¼ Mk0 ,l- lhrky{eh ½ ¼jkBksM 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:- 15/10/2025. *Santosh vkns'k dh izfrfyfi vxzsf’kr@Copy of the order forwarded to: 1. vihykFkhZ@The Appellant- DCIT, Central Circle-1, Jaipur. 2. izR;FkhZ@ The Respondent- M/s Royal Developers, Jaipur. 3. vk;dj vk;qDr@ CIT 4. vk;dj vk;qDr@ CIT(A) 5. foHkkxh; izfrfuf/k] vk;dj vihyh; vf/kdj.k] t;iqj@DR, ITAT, Jaipur. 6. xkMZ QkbZy@ Guard File { ITA No. 448/JPR/2025} vkns'kkuqlkj@ By order, lgk;d iathdkj@Asst. Registrar Printed from counselvise.com "