SHARAD KUMAR CHORADIA,JAIPUR V. ACIT, CENTRAL CIRCLE-2, JAIPUR, JAIPUR

ITA 976/JPR/2025

AI Insights

The case involves six appeals filed by Sharad Kumar Choradia against the orders of the CIT(A) for the assessment years 2014-15 to 2019-20. The appeals were consolidated due to the interrelated issues and identical facts, except for the disputed figures in each year. The primary contention was regarding the unaccounted brokerage income estimated by the AO based on the seized documents during a search operation on the Oswal Soap Group, of which the assessee was a member. The Tribunal considered the submissions and evidence presented, including the nature of the brokerage business and the expenses incurred, and made a decision to partly allow the appeal.

• Counselvise Citation: [2025] 140 COUNSELVISE.COM (IT) 775111 (ITAT-JAIPUR)
• Duration Of Justice: 2 month(s) 5 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 02-09-2025
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: A
• Assessment Year: 2015-2016
• Appeal Filed On: 27-06-2025
• Other Referred Cases: Trilok Chand Chaudhary Vs. ACIT, Gulam Farooq Ansari vs ACIT, Kailash Chand Maheshwari vs DCIT, ACIT, Circle-1 (2) Vs. Serajuddin and Company
• Laws Referred To: Income Tax Act, 1961
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: ANITA RINES H
• Assessee Lawyers: VIJAY GOYAL; KAPIL KHEJROLIA; UCDR; UCDR DURING; MS UTTAM CHAND DESH RAJ FROM A.Y
• Keywords: Business income; Opportunity of being heard; Corroborative evidences; Document seized; Documents seized; Search and seizure; Block assessment; Loose papers; Assessment record; Competent authority; Initiation of penalty proceedings; Validity of assessment; Presumptive income
• Section: 143(3); 142(1); 132; 153A; 139

Judgement Text

" vk;dj vihyh; vf/kdj.k] t;iqj U;k;ihB] t;iqj IN THE INCOME TAX APPELLATE TRIBUNAL, JAIPUR BENCHES,”A” JAIPUR Jh jkBkSM+ deys'k t;UrHkkbZ] ys[kk lnL; ,o Jh ujsUnz dqekj] U;kf;d lnL; ds le{k BEFORE: SHRI RATHOD KAMLESH JAYANTBHAI, AM & SHRI NARINDER KUMAR, JM vk;dj vihy la-@ITA Nos. 975 to 980/JP/2025 fu/kZkj.k o\"kZ@Assessment Years : 2014-15 to 2019-20 Sharad Kumar Choradia 3-CHHA-4, Jawahar Nagar, Jaipur cuke Vs. ACIT, Central Circle-02, Jaipur LFkk;h ys[kk la-@thvkbZvkj la-@PAN/GIR No.: AALPC3487C vihykFkhZ@Appellant izR;FkhZ@Respondent fu/kZkfjrh dh vksj ls@ Assessee by : Sh. Vijay Goyal, CA & Sh. Kapil Khejrolia, CA jktLo dh vksj ls@ Revenue by : Mrs. Anita Rinesh, JCIT, Sr. DR lquokbZ dh rkjh[k@ Date of Hearing : 14/08/2025 mn?kks\"k.kk dh rkjh[k@Date of Pronouncement: 02/09/2025 vkns'k@ ORDER PER: RATHOD KAMLESH JAYANTBHAI, AM These six appeals are filed by the assessee aggrieved from the orders of the learned Commissioner of Income Tax (Appeal), Jaipur- 04 [ for short CIT(A)] for the assessment years 2014-15 to 2019-20 dated 26.05.2025. The said orders of the ld. CIT(A) arise as against the orders dated 29.04.2021 passed under section 153A/143(3) of the Income Tax Act, 1961 [ for short Act ] by ACIT, Central Circle-02, Jaipur [ for short AO ]. Printed from counselvise.com 2 ITA Nos. 975 to 980/JP/2025 Sharad Kumar Choradia vs. ACIT 2. Since the issues involved in these appeals in ITA Nos. 975 to 980/JP/2025 for A.Ys 2014-15 to 2019-20 are inter related, on identical facts and are almost common, except the difference in figure disputed in each year, these appeals were heard together with the agreement of both the parties and are being disposed off by this consolidated order. 3. At the outset, the ld. AR has submitted that the matter in ITA No. 978/JP/2025 may be taken as a lead case for discussions as the issues involved in the lead case are common and inextricably interlinked or in fact interwoven and the facts and circumstances of other cases are identical except the difference in the amount disputed. The ld. DR did not raise any specific objection against taking that said appeal as a lead case. Therefore, for the purpose of the present discussions, the case of the assessee in ITA No. 978/JP/2025 is taken as a lead case. 4. Before moving towards the facts of the case we would like to mention that the assessee has assailed the appeal for assessment year 2017-18 in ITA No. 978/JP/2025 on the following grounds; “1. On the facts, in the circumstances of the case and in law, the Ld. CIT (A) erred in not annulling the assessment order more so when the assessment proceeding completed u/s 153A r.w.s. 143(3) of the Act was bad in law, void-ab- initio, and deserves to be annulled for the reasons that (i) The show cause notice was not issued for the year under consideration and common show cause notice Printed from counselvise.com 3 ITA Nos. 975 to 980/JP/2025 Sharad Kumar Choradia vs. ACIT was issued for all the years; (ii) the improper common approval was granted u/s 153D and the approval was in mechanical manner and without providing opportunity of hearing and without DIN. 2. On the facts and in the circumstances of the case, the Ld. CIT(A) has erred in confirming the addition of Rs.6,89,640/- +3,42,000= Rs. 10,31,640/- made by the Ld. AO on account of alleged unaccounted brokerage earned on the funds of M/s Uttam Chand Desraj rotated through assessee. It is contented that:- (i) Further also the ld. AO estimated the brokerage of whole year by estimating the same on the sum of total funds given during the year on various dates by ignoring the fact that actually such funds did not give on the single day and the same given on the various dates of the year and also rotated periodically, thus the brokerage on such funds cannot be estimated for whole year. (ii) Further also the learned A.O taxed the entire brokerage receipts without allowing the due deduction on account of expenses incurred for earning such brokerage by ignoring the established and accepted position of law that each business receipts are subject to incurring of certain expenses, therefore the entire receipt cannot be taxed as income and due deduction of account of expenses should be allowed. 3. On the facts and in the circumstances of the case, the Ld. CIT(A) has erred in confirming the addition of Rs.87,430/- made by the Ld. AO on account of alleged unaccounted brokerage earned on the loans given to various other parties, through assessee. It is contented that the A.O. further erred in taxing the entire brokerage receipts without allowing the due deduction on account of expenses incurred for earning such brokerage by ignoring the established and accepted position of law that each business receipts are subject to incurring of certain expenses, therefore the entire receipt cannot be taxed as income and due deduction on account of expenses should be allowed. 4. The appellant prays for leave to Add, to amend, to delete, or modify all or any grounds of appeal on or before the hearing of appeal. 5. Succinctly, the facts as culled out from the records are that a search and seizure action u/s 132 of the Act was carried out by the Income Tax Department on the members of the Oswal Soap Group on 06-09-2018 of which assessee is one of the members. The jurisdiction over the case was assigned to Central Circle 2, Jaipur by the Pr. Commissioner of Income Printed from counselvise.com 4 ITA Nos. 975 to 980/JP/2025 Sharad Kumar Choradia vs. ACIT Tax, Jaipur-II, Jaipur by means of an order u/s 127 of the Act dated 25.04.2019. Notice under section 153A of the Act dated 16-07-2019 was issued through ITBA and served upon the assessee speed post on 19-07- 2019 requiring his to file a true and correct return of income as prescribed under Rule 12 of the Income Tax Rules, 1962 within 30 days of the service of the said notice. In response to the said notice(s), a return declaring an income of Rs. 3,84,870/- was filed by the assessee on 13-08-2019. In the return of income originally filed by the assessee u/s 139(1) of the Act on 14-07-2017 an income of Rs. 3,84,870/- was declared. However, in the return of income filed in response to notice u/s 153A of the Act no undisclosed income pertaining to the relevant year has been declared by the assessee. As claimed the assessee primarily derives his income from Business and Other sources. The proceedings of assessment of income were commenced by issue of notice u/s 143(2) of the Act on 23-10-2019. Subsequently notice u/s 142(1) dated 23-10-2019 was also issued to the assessee and information and details pertaining to the case relevant to assessment of his income were called by means of a questionnaire. The information furnished by the assessee was examined and placed on Printed from counselvise.com 5 ITA Nos. 975 to 980/JP/2025 Sharad Kumar Choradia vs. ACIT record, Books of accounts/bills and vouchers were produced and examined on test-check basis by the ld. AO. Ld. AO based on the entries in the cash books seized from office of M/s Uttam Chand Deshraj, 238, Purohit Pada, Brahampuri, Jaipur, noted that M/s Uttam Chand Deshraj has rotated its undisclosed cash through finance brokers in the market, assessee is one of the finance brokers. Ld. AO noted that over the years from F.Y 2013-14 to 2018-19 payment was made for an amount of Rs. 13,74,06,700/- and receipt was recorded for an amount of Rs. 9,98,89,049/-. Thereby the closing balance was derived for an amount of Rs. Rs. 3,75,17,651 (Rs. 13,74,06,700 less Rs. 9,98,89,049). While search proceedings various documents were seized from the residential premises of Monica Jain, Sanjay Jain, Ajay Jain, Flat No. 404, Karan Upasana Residency, Peelwa Garden, Moti Doongri Road, Jaipur and inventoried as Annexure-AS Exhibit 1 to 8. Exhibit 8 of seized material is a note book containing details of cash loans given to various persons. Page No. 8 & 9 of Exhibit-8 is related to cash loans which were given through assessee are still pending in the market. Ld. AO noted that based on details prepared on the basis of seized cash note book as found that total loans of Rs.3,75,17,651 are outstanding as on date which were rotated through the assessee. But as per the details of page 8 & 9, Exhibit- Printed from counselvise.com 6 ITA Nos. 975 to 980/JP/2025 Sharad Kumar Choradia vs. ACIT 8, Annexure-AS seized from Flat No.- 404, Karan Upasana Residency, Peelwa Garden, Moti Doongri Road, Jaipur, total loans of Rs. 4,45,00,000 are outstanding as on date which were rotated through the assessee. While that search proceeding at the residential premises 3 Chha 4, Jawahar Nagar, Jaipur, loose papers were seized and inventoried as Annexure AS, Exhibit-1 and Exhibit-2 containing total pages 1 to 24 and 1 to 22. The pages are written in hand and details of cash loans, names of both parties, interest on these loans and rate of interest are mentioned. The assessee rotated the funds of various persons on interest and received brokerage @ Rs.100/- on one lakh from the party who received the loan. The assessee also submitted in his statements taken while search proceedings that the parties who have requirement of funds contact him and then assessee contacts the persons, who are willing to provide funds and further that the assessee does such transactions both in cash and cheques. Based on these records, a statement showing month wise funds received and provided was prepared as under; Printed from counselvise.com 7 ITA Nos. 975 to 980/JP/2025 Sharad Kumar Choradia vs. ACIT Printed from counselvise.com 8 ITA Nos. 975 to 980/JP/2025 Sharad Kumar Choradia vs. ACIT Printed from counselvise.com 9 ITA Nos. 975 to 980/JP/2025 Sharad Kumar Choradia vs. ACIT At the residential premises 3 Chha 4, Jawahar Nagar, Jaipur, hundies and receipts of loans and undated signed cheques kept for security of funds were seized and inventoried as Annexure-AS Exhibit-3 containing total pages 1 to 37, Annexure-AS Exhibit-6 containing total pages 1 to 28 and Printed from counselvise.com 10 ITA Nos. 975 to 980/JP/2025 Sharad Kumar Choradia vs. ACIT Annexure-AS Exhibit-9 containing total pages 1 to 34. The above hundies and receipts are of cash loans and the signed, undated, amount filled cheques are kept for the security of funds given on interest in cash. In the proceeding before the ld. AO, the assessee was requested to peruse the above lists / details and quantify the actual transaction made through him giving a chart of the same with details like date of transaction, name of lender, name of borrower, period of loan, rate of interest, mode cheque / cash / other than cheque or cash, commission earned, interest earned, whether such income offered for tax etc. were asked. Also, it was requested to provide address and PAN of the person to whom such loans were provided and from whom such loans were procured. The assessee on this issue filed a detailed reply dated 01.02.2021. The ld. AO noted from that reply that contention raised by the assessee were not found tenable to complete extent. Ld. AO based on the seized material and that of the submission of the assessee noted that assessee involved in the business of finance brokerage and thereby routing accounted / unaccounted cash in lieu of commission. As claimed the transaction carried out through assessee has been found from three places; 1. Cash book seized from office of M/s. Uttam Chand Deshraj. Printed from counselvise.com 11 ITA Nos. 975 to 980/JP/2025 Sharad Kumar Choradia vs. ACIT Ld. AO noted that M/s Uttam Chand Deshraj has rotated its undisclosed cash through finance brokers in the market, assessee is one of the finance brokers. During various years the assessee has rotated funds of M/s Uttam Chand Desraj for the sake of commission. The details of funds rotated by him belonging to M/s. Uttam Chand Desraj for various years are as under: On the above brokerage is calculated on the same @0.1% per month. On perusal of the above table, it can be seen that the Printed from counselvise.com 12 ITA Nos. 975 to 980/JP/2025 Sharad Kumar Choradia vs. ACIT assessee has earned brokerage from the F.Y 2016-17 and for the year under consideration i.e. A.Y 2017-18 of Rs. 6,89,640/- on the funds rotated of M/s. Uttam Chand Desraj. The same amount has not been offered for tax. It is pertinent to mention that M/s. Uttam Chand Desraj has offered the cash loans rotated through Shri Sharad Kumar Chordia before Hon'ble ITSC and paid the due taxes. Though, Shri Sharad Kumar Chordia has not offered the commission receipt on these funds. Therefore, the same is required to be brought to tax and therefore, an amount of Rs.6,89,640/- added to the total income of the assessee. 2. Seizure of document from the residential premises of Monica Jain, Monica Jain, Sanjay Jain, Ajay Jain, Flat No.-404, Karan Upasana Residency, Peelwa Garden, Moti Doongri Road, Jaipur. The transactions carried out by the assessee on the behalf of M/s. Uttam Chand Desraj, the details of which were found from No.-404, Karan Upasana Residency, Peelwa Garden, Moti Doongri Road and the brokerage earned by him in various years were tabulated as under:- Printed from counselvise.com 13 ITA Nos. 975 to 980/JP/2025 Sharad Kumar Choradia vs. ACIT Ld. AO on perusal of the above table, noticed that the total brokerage earned by the assessee during the year under consideration stands at Rs.3,42,000/- The submission of the assessee that the said brokerage on funds mentioned at (1) includes the brokerage earned on the transactions mentioned at (2) above does not hold merit as such the assessee failed to prove nexus to substantiate the same. Therefore, the brokerage earned by the assessee on the transactions carried out at (2) for the year under consideration has escaped taxation for an amount of Rs.3,42,000/- and thereby the same was added to the total income of the assessee. Printed from counselvise.com 14 ITA Nos. 975 to 980/JP/2025 Sharad Kumar Choradia vs. ACIT (3) The assessee is involved in the business of finance brokerage. He rotates the funds of clients in lieu of the commission. In the assessment proceedings the assessee was requested to furnish the complete details of such transactions carried out by the him and was also requested to furnish the details of brokerage earned by him. The asssessee was further requested to provide the details of parties whose funds have been routed by the assessee in lieu of brokerage. But the assessee made a complete denial to provide list of such parties. Therefore, the assessee has voluntarily chosen to be an accomplice in the tax evasion. Though the assessee has taken a plea that he has been involved in the business of finance brokerage only and his income is in the form of brokerage only. Therefore, the said brokerage only required to be taxed, and he should not be held liable for the funds of other parties which have been routed through him, as he had received only brokerage income only on such funds. Ld. AO based on the record available before him estimated income of Rs. 87,430/-. Printed from counselvise.com 15 ITA Nos. 975 to 980/JP/2025 Sharad Kumar Choradia vs. ACIT 6. Aggrieved by the above order of assessment the assessee preferred an appeal before the ld. CIT(A). Apropos of the grounds so raised the relevant finding of the ld. CIT(A) while dismissing the appeal of the assessee reads as under: Ground No. 1 4.2 I have considered the facts of the case and written submissions of the appellant as against the observations/findings of the AO in the assessment order for the year under consideration. The contentions/submissions of the appellant are being discussed and decided as under:- On perusal of the assessment order it is clear that the Id. Assessing Officer discussed the issues in the order confronted the assessee on all issues under discussion, tabulated the transactions in the order for analysis. The Id. Assessing Officer has considered the reply of the assessee in his order and then came to conclusion on the basis of the statements recorded during the search, thereafter the analysis of the seized material that the assessee is a finance broker lending mone to various persons on behalf of M/s Uttam Chand Deshraj as well as others interest. This business and the brokerage income earned on account of brokera received @ Rs. 100/- on one lakh from the party who received the loan was not accounted for in the books and forms part of undisclosed income and has been well tabulated and discussed in the assessment order. Therefore the ground raised by the assessee does not hold any merit and is general in nature and is liable to be dismissed. Hence, this ground of appeal is dismissed. Ground Nos. 2 to 4 5.2 I have considered the facts of the case and written submissions of the appellant as against the observations/findings of the AO in the assessment order for the year under consideration. The contentions/submissions of the appellant are being discussed and decided as under:- The fact is that the appellant is a finance broker and lends the money of M/s Uttam Chand Deshraj and other parties in the market on commission basis. The Id. Assessing officer has clearly dealt with this issue at para no. 12 of the Printed from counselvise.com 16 ITA Nos. 975 to 980/JP/2025 Sharad Kumar Choradia vs. ACIT assessment order. I find that the A.O. has taken into consideration the documents seized during the search, the submission made by the assessee and made a considered conclusion thereafter, that the assessee charged brokerage/commission on the money lent of M/s Uttam Chand Deshraj and others to borrowers at the rate of Rs. 100/- on Rs. 1,00,000/- and during the course of search proceedings the transactions carried out by the assessee of this nature were found from three places and each of this transaction was discussed separately. I have gone through the statement recorded during search proceedings of the assessee wherein he has categorically stated that he earns a brokerage of Rs. 100/- per Rs. One lakhs of financing transaction. On this basis, the Id. Assessing Officer has worked out a chart from the seized documents and material available on record and has calculated the brokerage earned on these transactions by the assessee. The assessee has merely challenged the addition done by the AO and has not given any working from his side to correct any anomalies in the calculation, if any. I have considered the working of the AO to calculate the brokerage earned by the assessee and in the light of the above discussion and facts of the case, I do not find that it needs any intervention and hence the assessee deserves no relief on addition of Rs. 6,89,640/-, addition of Rs. 3,42,000/- and addition of Rs. 87,430/- on these grounds. Hence, these grounds of appeal cannot be sustained. Hence, these grounds of appeal are dismissed. Ground No. 5 6.2 I have considered the facts of the case and written submissions of the appellant as against the observations/findings of the AO in the assessment order for the year under consideration. The contentions/submissions of the appellant are being discussed and decided as under:- This ground of the assessee does not hold ground for calling of the benefit of telescoping and rotation of funds as the Id. Assessing Officer has clearly held that the assessee is a finance broker and earns brokerage/commission @ 100/- per Rs. One lakh lent to the borrower. Since, he is lending other person's money and only earns brokerage/commission this ground of appeal has no merits. I have gone through the submission of the assessee on this ground and no evidence to the contrary has been submitted by the assessee. Rather, I find that this ground of appeal of the assessee is contrary to Grounds No. 2 to 4 of this appeal taken by the assessee, as discussed above, where the appellant claims to be a finance Printed from counselvise.com 17 ITA Nos. 975 to 980/JP/2025 Sharad Kumar Choradia vs. ACIT broker dealing in lending of other persons money on brokerage basis and hence this ground cannot be sustained. Hence, this ground of appeal is rejected. Ground No. 6 7.2 I have considered the facts of the case and written submissions of the appellant as against the observations/findings of the AO in the assessmen order for the year under consideration. The contentions/submissions of the appellant are being discussed and decided as under:- The ground is general in nature. The grounds are pre-mature as these are agai mere initiation of penalty proceedings. Penalty proceedings are independ proceedings and the appellant is required to make his submissions before appropriate authority during the penalty proceedings. Accordingly, the groun appeal raised by the appellant on this issue is treated as disposed off. Ground No. 7 8.2 I have considered the facts of the case and written submissions of the appellant as against the observations/findings of the AO in the assessment order for the year under consideration. The contentions/submissions of the appellant are being discussed and decided as under:- This is consequential in nature, since the grounds of the other additions made have been adjudicated, this ground of appeal is not required to be adjudicated separately. Ground No. 8 9.1 The appellant has not added and altered any of the above mentioned ground 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. Feeling dissatisfied with the finding so recorded in the order of the ld. CIT(A), the assessee preferred the present appeal before this tribunal. To support the various grounds raised by the assessee, ld. AR of the assessee filed a detailed written submission which reads as under : Printed from counselvise.com 18 ITA Nos. 975 to 980/JP/2025 Sharad Kumar Choradia vs. ACIT Facts of the case: - 1.1 The assessee is an Individual and during the years under consideration he earned the brokerage income from finance business and other sources. In the years under consideration the assessee was carrying the business of finance broker in which the assessee’s role was limited to as middleman in lending the funds of one party to another party and in lieu of that he was earning the brokerage. 1.2 The Search & seizure operation over the assessee was carried out by the I.T. Department on 06-09-2018 on \"Oswal Soap Group\" and assessee was also covered in this search (Copy of Panchnama is at PB Page 1 to 15). The case of the assessee was centralized in Central Circle-2, Jaipur. Notices u/s 153A of Income Tax Act, 1961 for the A.Y. 2014-15 to A.Y. 2018-19 were issued to assessee on 16.07.2019 and in response to such notices the assessee duly filed his ITR’s on 13.08.2019, wherein the income which already declared in ITR filed u/s 139 was only declared and no additional income was declared. 1.3 The assessments were completed by ld. AO vide order dated 29.04.2021. In the assessment the Ld. A.O. made the certain additions. Aggrieved, from the addition made by Ld. A.O. the assessee filed appeal before CIT (A), which was decided by CIT (A) vide order dated 26.05.2025, wherein part additions were deleted and part were confirmed, detail of which is as under: - Asstt Year Particulars of addition Amount of addition confirmed 2014-15 Estimation of brokerage on finance 1,18,704 2015-16 Estimation of brokerage on finance 3,31,764 2016-17 Estimation of brokerage on finance 7,72,524 2017-18 Estimation of brokerage on finance 11,19,070 2018-19 Estimation of brokerage on finance 9,49,273 2019-20 Estimation of brokerage on finance 6,30,771 Total 39,22,106 1.4 Aggrieved from the additions sustained by Ld. CIT (A), the assessee in appeal before Hon’ble Bench. The department is not in appeal. 2. Seized Records as the result of search related to addition in dispute:- (I) From the possession of Oswal Soap Group:- (i) Cash books seized from office of M/s Uttam Chand Desh Raj, 238, Purohit Pada, Brahampuri, Jaipur (for A.Y. 2014-15 to A.Y. 2019-20), which comprise the noting regarding the Cash given/received back by M/s Uttam Chand Desh Raj to/from the assessee. Printed from counselvise.com 19 ITA Nos. 975 to 980/JP/2025 Sharad Kumar Choradia vs. ACIT (ii) Documents seized from the residential premises of Monica Jain, Sanjay Jain, Ajay Jain from Flat No.-404, Karan Upasana Residency, Peelwa Garden, Moti Doongri Road, Jaipur (for A.Y. 2014-15 to A.Y. 2019-20), which show the party wise detail of the funds lent by M/s Uttam Chand Desraj through the assessee along with date on which the funds were lent. (II) From the possession of Assessee:- Exhibit-AS-1 found & seized from the residence of the assessee at 3-Cha-4, Jawahar Nagar, Jaipur (for A.Y. 2017-18 to A.Y. 2019-20), which comprise the month wise summary of amount of cash loans, names of both the parties i.e. lender and borrower and dates etc. 3. Appeal of A.Y. 2014-15 to A.Y. 2019-20 (ITA No. 975 to 980/JPR/2025) submission on grounds of appeal. The assessee has raised three grounds in Form No 36 filed before Hon'ble Tribunal. In Ground No 1 legality of assessment has challenged and in Ground No 2 and 3 additions sustained on account of brokerage is challenged on merit. We are first giving our submission in respect of Ground No 2 and 3 of the appeal and since the issue is common in all appeals, therefore the common submission for all the years is being submitted. For reference base year is taken AY 2017-18. 3.1 Findings of AO: - Page 49 to 59 of order (AY 2017-18) 3.2 Findings of CIT(A): - Page 40 of his order (AY 2017-18) 3.3 Submission of Assessee: - 3.3.1 Chart showing addition made and confirmed on account of brokerage:- The ld AO estimated the unaccounted brokerage as under:- AY On the basis of Documents seized from Oswal Group Uttam Chand Desh Raj 238, Purohit Pada, Brahampuri, Jaipur Documents seized from Oswal Group from Flat No.- 404, Karan Upasana Residency, Peelwa Garden, Moti Doongri Documents seized from the assessee at his residence Total Brokerage estimated Printed from counselvise.com 20 ITA Nos. 975 to 980/JP/2025 Sharad Kumar Choradia vs. ACIT Road, Jaipur Total Payments made to assessee by UCDR during the year Total Payment received from assessee by UCDR during the year Base Amount taken for estimation of brokerage for 12 months @0.10% Brokerage estimated for 12 months on Finance of Uttam Chand Desh Raj Brokerage estimated for 12 months on Finance of Uttam Chand Desh Raj Brokerage estimated on other party’s finance 1 2 3 4 5 6 7 8 = (5+6+7) 2014-15 2300000 8892320 8892320 106704 12000 0 118704 2015-16 26247000 11197880 26247000 314964 16800 0 331764 2016-17 47377000 23269145 47377000 568524 204000 0 772524 2017-18 57469500 31252990 57469500 689640 342000 87430 1119070 2018-19 4013200 22374144 22374144 268488 534000 146785 949273 2019-20 0 2902570 2902570 31236 534000 65535 630771 Total 137406700 99889049 1979556 1642800 299750 3922106 3.3.2 Addition on account of brokerage is not based on the entries in seized record but by mere estimation: The Income Tax Department seized document as mentioned in para 2 above. The seized records nowhere indicate the entries of brokerage. The Ld. AO estimated the brokerage income at her own working. She neither worked out the brokerage in fair manner nor she estimated expenses against the income. When the income is estimated simultaneously, expenses like operation expenses, vehicle expenses etc. should also be estimated. The income cannot be earned without incurring the expenses. In finance brokerage business particularly in cash business staff is required to handle the cash and vehicles is required to carry cash from one place to another place. 3.3.3 Addition based on entries in Cash Book seized from Uttam Chand Desh Raj:- (i) It is admitted fact that the brokerage was calculated by ld AO on the basis of material seized from third parties i.e. M/s Uttam Chand Desh Raj and such material cannot be considered for making additions under section 153A of the Income Printed from counselvise.com 21 ITA Nos. 975 to 980/JP/2025 Sharad Kumar Choradia vs. ACIT Tax Act, as the provision requires incriminating material from the search conducted on the assessee. It is contended that no such addition could be made under section 153A based on documents seized from third parties. Reliance is placed on the following decision:- Trilok Chand Chaudhary Vs. ACIT ITA No.5870/Del/2017 ITAT, Delhi Bench G, New Delhi Date of order : 20/09/2019 Para 5.4 of the order. (ii) The department seized a cash books from the office of M/s Uttam Chand Desh Raj, which contain the entries of cash payment to assessee and entries of cash received from assessee on various dates. The Ld. AO tabulated these entries at Page 2-22 of assessment order. From the perusal of these entries, it is crystal clear that entries are relating to payment of cash to assessee and cash received from assessee. It does not have any narration or other particulars to show that these entries pertain to the loans given through the assessee. It is like a current account maintained by M/s Uttam Chand Desh Raj in the name of the assessee, which is also clear from entries of very petty amount in payment/ receipt side of table. Some entries for examples are mentioned as under: - Asstt. Order Page No. Payment Receipt Date Amount Date Amount 3 01-01-2014 5070 3 29-01-2014 550 3 03-06-2014 3000 4 08-09-2014 5100 4 07-11-2014 2500 4 17-11-2014 580 5 13-01-2015 5100 5 11-03-2015 3000 6 10-06-2015 3700 7 18-06-2015 17000 7 11-07-2015 6750 7 27-10-2015 450 8 25-12-2015 880 9 08-01-2016 9000 9 16-01-2016 5400 9 21-01-2016 8000 10 22-01-2016 600 11 17-03-2016 5400 12 12-04-2016 800 13 12-05-2016 9000 14 09-06-2016 9000 14 19-07-2016 1600 Printed from counselvise.com 22 ITA Nos. 975 to 980/JP/2025 Sharad Kumar Choradia vs. ACIT 15 17-09-2016 7400 16 03-12-2016 9600 17 27-12-2016 1300 18 07-03-2017 6130 18 27-03-2017 10500 19 25-06-2017 1940 19 14-07-2017 13200 20 30-12-2017 847 These small entries clearly indicate that M/s Uttam Chand Desh Raj maintained a current account for giving cash to assessee (payment side) and receiving back the cash from the assessee (Received side). Therefore, the brokerage on this amount cannot be earned by the assessee neither from M/s Uttam Chand Desh Raj nor from other parties. M/s Uttam Chand Desh Raj was used to send surplus cash with the assessee, and out of that some part of the cash was utilized in giving the loan by the assessee on behalf of M/s Uttam Chand Desh Raj. The actual cash given to the borrower was found recorded in separate documents seized from the residence premises of Oswal Group situated at Flat no-404, Karan Upasana Residency, Peelwa Garden, Moti Doongri Road, Jaipur against which the Ld. AO tabulated the chart at his page no. 22 to 25 of his order and also calculated brokerage at page no. 51 of assessment order. The copy of the seized documents Annexure AS Exhibit 8 page No 8-9 seized from residential flat of Oswal Group is enclosed herewith. According to that seized page the total of loans advance is Rs. 4,45,00,000/-. Whereas, as per cash book total payments to assessee by M/s Uttam Chand Desh Raj from A.Y. 2014-15 to A.Y. 2019-20 come to Rs 13,74,06,700/- and total receipts come to Rs 9,98,89,049/- meaning thereby, outstanding balance of Rs 3,75,70,651/-. The total outstanding as per seized Annexure AS Exhibit 8 page No 8-9 is Rs 4,45,00,000/-. The reason for difference is that one entry in the said seized paper is dated 12-05- 2010 of Rs 10,00,000/-. Further, the seized cash book is from 13-09-2013 and entries from 01-04-2013 to 12-09-2013 are not in the seized cash book. However, the figure of Rs 3.75 crores very close to 4.35 crore which establishes that part of the funds given to the assessee by M/s Uttam Chand Desh Raj was utilized in giving loan by the assessee on behalf of M/s Uttam Chand Desh Raj and the un-utilized funds were returned back to M/s Uttam Chand Desh Raj by the assessee. Therefore, the brokerage cannot be estimated on the transactions of the current account more so when the brokerage was separately estimated on the entries of actual loan through the assessee recorded on the seized documents found from the possession of Oswal Group. (iii) Brokerage estimated on the amount returned/re-paid by the assessee to M/s Uttam Chand Desh Raj:- Printed from counselvise.com 23 ITA Nos. 975 to 980/JP/2025 Sharad Kumar Choradia vs. ACIT During A.Y. 2014-15, total payments to the assessee were Rs 23,00,000/- and total receipts from the assessee were Rs 88,92,320/- (page 3 of the assessment order A.Y. 2017-18). Similarly, in A.Y.2018-19 total payments to the assessee were Rs 40,13,200/- and total receipts were of Rs 2,23,74,144 /- (page 21 of the assessment order A.Y. 2017-18) and in A.Y. 2019-20 there was no payment to the assessee and total receipts from the assessee were 29,02,570/- (page 21-22 of the assessment order). The Ld. AO calculated the brokerage on cash re-paid / returned by the assessee to M/s Uttam Chand Desh Raj ignoring the fact that the brokerage can be earned only from the person who takes loan through the assessee. (iv) Brokerage calculated for 12 months ignoring the actual date of entries in the seized cash book whereas the brokerage against the funds of parties other than M/s Uttam Chand Desh Raj was calculated on month to month basis:- The Ld. AO calculated the brokerage for 12 months for entire transactions during the particular year, ignoring the fact that entries of the receipts and payments are of different dates and for different amount. For example in A.Y. 2017-18 brokerage @ Rs 100 on Rs 1,00,000/- i.e, 0.10% was calculated on Rs 5,74,69,500/- (page 18 and 50 of the assessment order), whereas the fact remains the figure Rs 5,74,69,500/- is total figure of payments side starting from 08-04-2016 to 27-03-2017 (page 12-18 of the assessment order). There is different figure of different amount on different dates, therefore the brokerage for 12 months i.e, whole year cannot be calculated. The Ld. A.O. estimated the brokerage on the sum of entire year and not taking the receipt and payments on month-to-month basis whereas the brokerage against the funds of parties other than M/s Uttam Chand Desh Raj was calculated on month to month basis. No any reason was given by the ld AO for this different treatment. Without prejudice to the above submission, it is submitted that even if the brokerage is calculated on month to month basis on the entries of cash book, the Brokerage amount would be as under:- A.Y. Brokerage estimated by Ld. A.O. Brokerage as per working submitted by assessee to CIT (A) Working available at PB Page 2014-15 1,06,704 10,193 197 2015-16 3,14,964 28,570 227 2016-17 5,68,524 61,146 293 2017-18 6,89,640 71,119 327-328 2018-19 2,68,488 25,111 360-361 2019-20 31,236 2,902 403 Total 19,79,556 1,99,041 Printed from counselvise.com 24 ITA Nos. 975 to 980/JP/2025 Sharad Kumar Choradia vs. ACIT 3.3.4 Addition based on entries in seized documents Annexure AS Exhibit 8 page No 8-9 seized from residential flat of Oswal Group: - (i) It is admitted fact that the brokerage was calculated by ld AO on the basis of material seized from third parties i.e. AS Exhibit 8 page No 8-9 seized from residential flat of Oswal Group situated at Moti Doongri Road, Jaipur and such material cannot be considered for making additions under section 153A of the Income Tax Act, as the provision requires incriminating material from the search conducted on the assessee. It is contended that no such addition could be made under section 153A based on documents seized from third parties. Reliance is placed on the following decision:- Trilok Chand Chaudhary Vs. ACIT ITA No.5870/Del/2017 ITAT, Delhi Bench G, New Delhi Date of order : 20/09/2019 Para 5.4 of the order. (ii) On the basis of seized Annexure AS Exhibit 8 page No 8-9 the ld AO tabulated entries at Page 22-25 of assessment order for AY 2017-18, and the brokerage has been estimated for whole year, while the funds were not lent for entire years. From perusal of such detail your honour will find that the funds lent during the year were not outstanding for the entire year, however the ld. A.O. estimated the brokerage on such lending for entire year and the actual date of lending was ignored. (iii) Further, in A.Y. 2019-20 the Income Tax department carried out search over the assessee on 06.09.2018 and thereafter all its funds, which lent through the assessee, were called back by M/s Uttam Chand Des Raj. Accordingly, the assessee also asked to respective borrower party to return back the same. Since, this created unhappiness in between assessee and the borrower party, therefore no brokerage could be earned on such Cash advance after search. The ld. A.O. herself calculated the brokerage upto Aug 18 for the loans given to the parties out of the funds of other than M/s Uttam Chand Desh Raj (On the basis of documents seized from the possession of the assessee) kindly see the working of AO at page 57 of Assessment Order for AY 2017-18. The ld AO has given different treatments for the loans given out of the funds of M/s Uttam Chand Desh Raj without assigning any reason. (iv) Without prejudice to the fact the actual brokerage received/receivable is not ascertainable from the seized record, if still the brokerage is estimated, then also the same can only be estimated by working out for the period during which the loan remained outstanding and not for the entire year. Considering to this aspect, if brokerage is estimated, then the brokerage estimation comes far less then to the brokerage estimated by Ld. A.O. The assessee submitted the working of the same to CIT (A), detail of which is tabulated below but no cognization was given to that. Printed from counselvise.com 25 ITA Nos. 975 to 980/JP/2025 Sharad Kumar Choradia vs. ACIT A.Y. Brokerage estimated by Ld. A.O. Brokerage as per working submitted by assessee to CIT (A) Working available at PB Page 2016-17 2,04,000 59,170 296 2017-18 3,42,000 3,05,585 330-331 2018-19 5,34,000 4,99,350 363-364 2019-20 5,34,000 2,22,500 406 Total 16,14,000 10,86,605 Thus, in worst case if any brokerage is estimated on the above-mentioned transactions, then the same should be estimated Rs. 10,86,605/- only as against to Rs. 16,14,000/- estimated by ld. A.O. in arbitrary manner. 3.3.5 The entire brokerage income was taxed without allowing the benefit of expenses etc. 1. Without prejudice to the submission given in forgoing paras and alternatively it is submitted that the Ld. A.O. taxed the entire brokerage receipts without allowing the due deduction on account of expenses incurred for earning such brokerage by ignoring the established and accepted position of law that each business receipts are subject to incurring of certain expenses, therefore the entire receipt cannot be taxed as income and due deduction of account of expenses should be allowed. The brokerage income of the assessee was subjected to various expenses like conveyance, salary, etc. and the same were incurred to earn that, therefore the same entirely cannot be taxed as income of the assessee. It is also an admitted fact, that in case of cash transaction the confidential staff and vehicle is required for cash handling and safety, therefore the assessee was required to more expenses in cash finance business. The Ld. A.O. on the one hand estimated the brokerage income of the assessee and on the other hand has not estimated the corresponding expenses which may have incurred by the assessee for earning such income. This shows that the addition was made with bias mind. As regard entries of the expenses not having in the seized records, it is submitted that entries of brokerage are also not there in seized records but the same were estimated and the similar treatment should be given for estimation of expenses. The estimation of expenses incurred to earn should also be made in fair manner. It is reasonable to estimate salary of two person @ Rs. 20000/- PM and Vehicle Expenses @ Rs. 2000/- per Month. The year wise estimation of the expenses should be made as under:- Estimation of Expenses AY Salary Vehicle Others Total Printed from counselvise.com 26 ITA Nos. 975 to 980/JP/2025 Sharad Kumar Choradia vs. ACIT No of Person Monthly Salary Salary for the year Per Month Vehicle Expenses per month Misc. Exp 2014- 15 1 20000 240000 2000 24000 24000 288000 2015-16 1 22000 264000 2200 26400 26400 316800 2016-17 2 24200 580800 2400 28800 58080 667680 2017-18 2 26600 638400 2600 31200 63840 733440 2018-19 2 30000 720000 3000 36000 72000 828000 2019-20 2 33000 792000 3300 39600 79200 910800 Total 3235200 186000 323520 3744720 In alternative the net income of the brokerage receipts should be estimated by applying the 8% of the brokerage receipts or at other reasonable rate deem fit by Hon’ble Tribunal. In the case of Gulam Farooq Ansari vs ACIT ITA No 776/JP/2015 Jaipur ITAT, Hon’ble ITAT Jaipur has applied NP rate of 8% on property transactions. (Copy of the order enclosed). Further in the case of Kailash Chand Maheshwari vs DCIT Hon’ble ITAT Jaipur has applied 8% of gross receipts as income of the assessee. Considerting the above submission the reworking of net income from unaccounted Brokerage is calculated as under:- AY On the basis of Docume nts seized from Oswal Group Uttam Chand Desh Raj 238, Purohit Pada, Brahamp uri, Jaipur Document s seized from Oswal Group from Flat No.-404, Karan Upasana Residency , Peelwa Garden, Moti Doongri Road, Jaipur Document s seized from the assessee at his residence Total Gross Brokerag e estimated Exstimate d Expenses Net Undisclose d Income after set off of expenses Net Income after applying 8% of brokerag e receipts 1 2 3 4 5 6 7 Printed from counselvise.com 27 ITA Nos. 975 to 980/JP/2025 Sharad Kumar Choradia vs. ACIT 2014-15 0 12000 0 12000 288000 Loss 960 2015-16 0 16800 0 16800 316800 Loss 1344 2016-17 0 59170 0 59170 667680 Loss 4733.6 2017-18 0 305385 87430 392815 733440 Loss 31425.2 2018-19 0 4,99,350 146785 646135 828000 Loss 51690.8 2019-20 0 2,22,500 65535 288035 910800 Loss 23042.8 Total 0 1115205 299750 1414955 113196.4 (i) If setoff of estimated expenses is allowed against the estimated brokerage, then the net income from unaccounted brokerage would be loss (as indicated in column 6 of the above table) and this finds supports from the search statement of assessee in answer to question no 55 PB page 33 (ii) If theory of 8% net profit on gross receipts is applied the net income from unaccounted brokerage would be 1,13,194 for AY 2014-15 to AY 2019-20 as indicated in column 7 of the above table. It is also relevant to mention here that the department has not found any explained cash, jewellery or other assets as the result of the intensive search to support the huge addition of brokerage income. In view of above submission, it is submitted that the addition so made by ld. A.O. is unwarranted and deserve to be deleted as not supported by entries in the seized records and mere estimation of Ld AO. However, the estimation of brokerage income is at very high figure and no corresponding asset was found from the possession of assessee and it should be deleted or reduced substantially. 4. Ground No 1: - In this ground the legality of assessment order was challenged 4.1 AY 2014-15 and AY 2015-16 covered by decision of Hon’ble Apex Court in Pr. CIT vs. Abhisar Buildwell Pvt. Ltd. (149 Taxmann.com 399) The addition in AY 2014-15 and AY 2015-16 is not based on incriminating material found during search over the assessee but the same is made on the basis of documents found during search over \"Oswal Group\", therefore the addition on the basis of such documents in assessment proceeding u/s 153A of the Act is not permissible. The search in the case of assessee was taken place on 06.09.2018 and as on the date of search the assessment proceeding for AY 2014-15 and AY 2015-16 were not pending and the same had already attained finality. Thus, the ratio of decision of Hon’ble Apex Court in Pr. CIT vs. Abhisar Buildwell Pvt. Ltd. (149 Taxmann.com 399) is applicable in the case of the assessee and in the light of this Printed from counselvise.com 28 ITA Nos. 975 to 980/JP/2025 Sharad Kumar Choradia vs. ACIT decision the addition have necessarily to be based on incriminating material found during the course of search. 4.2 The approval was granted in mechanical manner and opportunity of hearing was not provided to the Appellant. From perusal of the assessment order, it is well apparent that the huge addition was made in a very causal and mechanical manner. The assessment was made without adhering and rebutting the submission of the assessee and also without bringing out the conclusive evidence to prove the allegations to be correct. The Ld. Addl/Jt CIT also approved the assessment order in mechanical manner, without application of mind and without examining the above vital facts. The approval was granted u/s 153D of the Act was granted without any consideration of factual and legal position in proposed additions and without contents of incriminating material collected in search etc. has looked into. This approach of the Add./Jt CIT has ipso facto rendered the impugned approval to be a mere ritual or an empty formality to meet the statutory requirement and cannot thus be countenanced in law. Thus, the approval given in a mechanical manner cannot be considered as a valid approval and thus the assessment order passed in consonance to that in also bad in law and invalid. Now settled proposition of law is that prior approval of competent authority under section 153D of the Act is mandatory and same is required to pass rigor of the law, to show that the approval was granted after due consideration of the assessment record and it was not a mechanical approval. Grant of approval under Section 153D of the Act cannot be merely a ritualistic formality or rubber stamping by the authority, rather it must reflect an appropriate application of mind. The CBDT issued the Manual of Office Procedure in February 2003 in exercise of the powers under Section 109 of the Act. Para 9 of Chapter 3 of Volume-II (Technical) of the Manual reads as under: “9. Approval for assessment: An assessment order under Chapter XIV-B can be passed only with the previous approval of the range JCIT/ADDL.CIT (For the period from 30-6-1995 to 31-12-1996 the approving authority was the CIT.). The Assessing Officer should submit the draft assessment order for such approval well in time. The submission of the draft order must be docketed in the order-sheet and a copy of the draft order and covering letter filed in the relevant miscellaneous records folder. Due opportunity of being heard should be given to the assessee by the supervisory officer giving approval to the proposed block assessment, at least one month before the time barring date. Finally, once such approval is granted, it must be in writing and filed in the relevant folder indicated above after making a due entry in the order-sheet. The assessment order can be passed only after the receipt of such approval. Printed from counselvise.com 29 ITA Nos. 975 to 980/JP/2025 Sharad Kumar Choradia vs. ACIT The fact that such approval has been obtained should also be mentioned in the body of the assessment order itself.” The requirement of prior approval under Section 153D of the Act is comparable with a similar requirement under Section 158BG of the Act. The only difference being that the latter provision occurs in Chapter-XIV-B relating to “special procedure for assessment of search cases” whereas Section 153D is part of Chapter-XIV. A plain reading of Section 153D itself makes it abundantly clear that the legislative intent was to be obtaining of “prior approval” by the AO when he is below the rank of a Joint Commissioner, before he passes an assessment order or reassessment order under Section 153A(1)(b) or 153B(2)(b) of the Act. In the case of ACIT, Circle-1 (2) Vs. Serajuddin and Co. the Hon’ble Supreme Court in SLP (Civil) Dairy No. 44989/2023 vide order dated 28/11/2023, dismissed the Appeal filed by the Department of Revenue against the order dated 15/03/2023 in ITA No. 43/2022 passed by the Hon’ble High Court of Orissa at Cuttack, wherein the Hon’ble High Court had quashed the Assessment Order on the ground of inadequacy in procedure adopted for issuing approval u/s 153D of the Act by expressing discordant note on such mechanical exercise of responsibility placed on designated authority under section 153D of the Act. In view of above it is humbly submitted that because the assessment order is arbitrary, whimsical, capricious, perverse and against the provisions of law, facts of the case, based on surmises and conjectures, therefore the same deserves to be quashed. 5. Prayer of Assessee: - The humble assessee prays your honour kindly to delete the addition made by Ld. A.O and sustained by Ld. CIT(A) and allow the appeal of assessee. Pray Justice (CA Dr. Vijay K Goyal) FCA/AR Encl:- 1) Copy of Seized documents Annexure AS Exhibit 8 page No 8-9 seized from residential flat of Oswal Group Printed from counselvise.com 30 ITA Nos. 975 to 980/JP/2025 Sharad Kumar Choradia vs. ACIT 2) Trilok Chand Chaudhary Vs. ACIT ITA No.5870/Del/2017 ITAT, Delhi Bench G, New Delhi Date of order : 20/09/2019 3) Copy of Order of ITAT Jaipur in case of Gulam Farooq Ansari vs ACIT ITA No 776/JP/2015 Jaipur ITAT 4) Copy of order of ITAT Jaipur in case of Kailash Chand Maheshwari vs DCIT Hon’ble ITAT Jaipur 5) Copy of order of Hon’ble Orissa High Court Cuttak Bench in the case of ACIT, Circle-1 (2) Vs. Serajuddin and Company 6) Copy of order of Hon’ble Supreme Court in the case of ACIT, Circle- 1 (2) Vs. Serajuddin and Company dismissing the SLP. 8. Further, the ld. AR of the assessee also filed additional written submission which reads as follows; During hearing of the case, Hon’ble Bench directed us to re-compute the brokerage on the entries of loan found in seized documents, from the residential flat of Oswal Group at 404, Karan Upasana Residency, Peelwa Garden, Moti Doongri Road, Jaipur and marked as Annexure AS Exhibit 8 page No 8-9. In this regard we firstly would like to brought the following facts in your kind attention: - i) As per the trade of the practice, the brokerage is always paid by the borrower party and no brokerage is received from the lender party. There is no dispute of this fact and this also accepted by Ld. A.O. ii) Initially, when the loan is disbursed to the borrower party the brokerage is paid @ Rs. 100 on per Rs. 1,00,000/- of loan amount i.e. 0.1% of loan amount. (This fact is stated by the assessee in his statement recorded during search and for this reference is drawn towards the reply of Q. No. 24 which is at PB Page 25). This is one-time brokerage received on account of facilitation of loan disbursement and but not receivable for each month. iii) After disbursement of loan, the role of assessee remains limited to collection of interest from borrower and paid the same to the lender. In lieu of that service, the lender party paid brokerage @ Rs. 10 on per 1,00,000/- on loan amount i.e. 0.01% of loan amount. (This fact is stated by the assessee in his statement recorded during search and for this reference is drawn towards the reply of Q. No. 53 PB Page 33). This brokerage is received for each month during which the loan continued. Printed from counselvise.com 31 ITA Nos. 975 to 980/JP/2025 Sharad Kumar Choradia vs. ACIT 2. In the light of above facts, the assessee has re-worked out the estimated brokerage, which the assessee may have earned on the transactions found in the seized documents Annexure AS Exhibit 8 page No 8-9. The working of the same is as under: - 2.1 A.Y. 2014-15: - Amount of loan given in earlier years Amount of loan given during the year Brokerage on the amount of loan given in earlier years on account of collection of interest 1*12*0.01%) Brokerage on the amount disbursed during the year on account of loan disbursed during the year (3*0.1%) Subsequent brokerage on the loan amount which disbursed during the year on account of collection of interest (3*4*.01%) Total Brokerage of the year (5+6+7) Month in which loan given Amount No of subsequent months of the year during which the loan remained O/s after disbursement. 1 2 3 4 5 6 7 8 10,00,000 - - - 1,200 - - 1,200 10,00,000 Total Loan 0.00 Total of brokerage 1,200 - - 1,200 2.2 A.Y. 2015-16: - Amount of loan given in earlier years Amount of loan given during the year Brokerage on the amount of loan given in earlier years on account of collection of interest 1*12*0.01%) Brokerage on the amount disbursed during the year on account of loan disbursed during the year (3*0.1%) Subsequent brokerage on the loan amount which disbursed during the year on account of collection of interest (3*4*.01%) Total Brokerage of the year (5+6+7) Month in which loan given Amount No of subsequent months of the year during which the loan remained O/s after disbursement. 1 2 3 4 5 6 7 8 10,00,000 August-14 4,00,000 7 1,200 400 280 1,880 10,00,000 Total Loan 4,00,000 Total of brokerage 1,200 400 280 1,880 2.3 A.Y. 2016-17: - Amount Amount of loan given during the year Brokerage Brokerage Subsequent Total Printed from counselvise.com 32 ITA Nos. 975 to 980/JP/2025 Sharad Kumar Choradia vs. ACIT of loan given in earlier years Month in which loan given Amount No of subsequent months of the year during which the loan remained O/s after disbursement. on the amount of loan given in earlier years on account of collection of interest 1*12*0.01%) on the amount disbursed during the year on account of loan disbursed during the year (3*0.1%) brokerage on the loan amount which disbursed during the year on account of collection of interest (3*4*.01%) Brokerage of the year (5+6+7) 1 2 3 4 5 6 7 8 14,00,000 September- 15 3,00,000 6 1,680 300 180 2,160 October-15 25,00,000 5 - 2,500 1,250 3,750 November- 15 13,00,000 4 - 1,300 520 1,820 December- 15 5,00,000 3 - 500 150 650 January-16 40,00,000 2 - 4,000 800 4,800 February-16 30,00,000 1 - 3,000 300 3,300 March-16 40,00,000 0 - 4,000 - 4,000 14,00,000 Total Loan 1,56,00,000 Total of brokerage 1,680 15,600 3,200 20,480 2.4 A.Y. 2017-18: - Amount of loan given in earlier years Amount of loan given during the year Brokerage on the amount of loan given in earlier years on account of collection of interest 1*12*0.01%) Brokerage on the amount disbursed during the year on account of loan disbursed during the year (3*0.1%) Subsequent brokerage on the loan amount which disbursed during the year on account of collection of interest (3*4*.01%) Total Brokerage of the year (5+6+7) Month in which loan given Amount No of subsequent months of the year during which the loan remained O/s after disbursement. 1 2 3 4 5 6 7 8 1,70,00,000 April-16 15,00,000 11 20,400 1,500 1,650 23,550 May-16 65,00,000 10 - 6,500 6,500 13,000 June-16 20,00,000 9 - 2,000 1,800 3,800 August-16 10,00,000 7 - 1,000 700 1,700 September- 6 500 300 Printed from counselvise.com 33 ITA Nos. 975 to 980/JP/2025 Sharad Kumar Choradia vs. ACIT 16 5,00,000 - 800 1,70,00,000 Total Loan 1,15,00,000 Total of brokerage 20,400 11,500 10,950 42,850 2.5 A.Y. 2018-19: - Amount of loan given in earlier years Amount of loan given during the year Brokerage on the amount of loan given in earlier years on account of collection of interest 1*12*0.01%) Brokerage on the amount disbursed during the year on account of loan disbursed during the year (3*0.1%) Subsequent brokerage on the loan amount which disbursed during the year on account of collection of interest (3*4*.01%) Total Brokerage of the year (5+6+7) Month in which loan given Amount No of subsequent months of the year during which the loan remained O/s after disbursement. 1 2 3 4 5 6 7 8 2,85,00,000 May-2017 1,10,00,000 10 34,200 11,000 11,000 56,200 June-2017 50,00,000 9 - 5,000 4,500 9,500 2,85,00,000 Total Loan 1,60,00,000 Total of brokerage 34,200 16,000 15,500 65,700 2.6 A.Y. 2019-20 (Up-to September-2018 i.e. month of search) Amount of loan given in earlier years Amount of loan given during the year Brokerage on the amount of loan given in earlier years on account of collection of interest 1*6*0.01%) Brokerage on the amount disbursed during the year on account of loan disbursed during the year (3*0.1%) Subsequent brokerage on the loan amount which disbursed during the year on account of collection of interest (3*4*.01%) Total Brokerage of the year (5+6+7) Month in which loan given Amount No of subsequent months of the year during which the loan remained O/s after disbursement. 1 2 3 4 5 6 7 8 4,45,00,000 - - - 26,700 - - 26,700 4,45,00,000 Total Loan - Total of brokerage 26,700 - - 26,700 3. In the light of arguments put forth before the bench and according the above working in worst case the gross brokerage of the assessee on the basis of documents seized from the premises of Oswal Group as well as assessee, should be as under and the appropriate deduction on account of expenses should be allowed therefrom: - A.Y. Based on documents seized from Oswal Base on documents seized from Oswal Based on documents seized Total Brokerage Printed from counselvise.com 34 ITA Nos. 975 to 980/JP/2025 Sharad Kumar Choradia vs. ACIT Group Uttam Chand Desh Raj 238, Purohit Pada, Brahampuri, Jaipur Group from Flat No.- 404, Karan Upasana Residency, Peelwa Garden, Moti Doongri Road, Jaipur from the assessee at his residence estimated (2+3+4) 1 2 3 4 5 2014-15 0.00 1,200 0.00 1,200 2015-16 0.00 1,880 0.00 1,880 2016-17 0.00 20,480 0.00 20,480 2017-18 0.00 42,850 87,430 1,30,280 2018-19 0.00 65,700 1,46,785 2,12,485 2019-20 0.00 26,700 65,535 92,235 Total 0.00 1,58,810 2,99,750 4,58,560 Above is submitted in compliance to the direction given by Hon’ble bench during the hearing. 9. To support the contention so raised in the written submission, reliance was placed on the following evidence & records by way of common paper book : S. No. Particulars Page No. Available before 1. Copy of Panchnama and Inventory of books of accounts, Jewellery, Cash etc. found & seized from following premises: - i. 3-Cha-4, Jawahar Nagar, Jaipur ii. Locker No. 26, Bank of India, Jawahar Nagar, Jaipur iii. Locker No. 1606, Ratna Sagar, MSB Ka Rasta, Johari Bazar, Jaipur 1 to 15 AO and CIT(A) 2. Copy of statement of Shri Sharad Kumar Choradia recorded during the course of search. 16 to 37 AO and CIT(A) 3. Copies of notices issued u/s 153A of the Act for A.Y. 2014-15 to A.Y. 2018-19 38 to 42 AO and CIT(A) 4 Copies of ITR and Computation of total income filed in response to notice issued u/s 153A of the Act of: - i. A.Y. 2014-15 ii. A.Y. 2015-16 iii. A.Y. 2016-17 iv. A.Y. 2017-18 v. A.Y. 2018-19 43 to 47 48 to 50 51 to 55 56 to 61 62 to 66 AO and CIT(A) 5. Copies of ITR and Computation of total income filed u/s 139(1) of the Act of: - i. A.Y. 2014-15 ii. A.Y. 2015-16 67 to 70 71 to 73 AO and CIT(A) Printed from counselvise.com 35 ITA Nos. 975 to 980/JP/2025 Sharad Kumar Choradia vs. ACIT iii. A.Y. 2016-17 iv. A.Y. 2017-18 v. A.Y. 2018-19 vi. A.Y. 2019-20 74 to 76 77 to 80 81 to 84 85 to 88 6. Copies of P&L a/c, Capital a/c and Balance Sheet of assessee of: - i. F.Y. 2013-14 (relevant A.Y. 2014-15) ii. F.Y. 2014-15 (relevant A.Y. 2015-16) iii. F.Y. 2015-16 (relevant A.Y. 2016-17) iv. F.Y. 2016-17 (relevant A.Y. 2017-18) v. F.Y. 2017-18 (relevant A.Y. 2018-19) vi. F.Y. 2018-19 (relevant A.Y. 2019-20) 89 to 90 91 to 92 93 to 94 95 to 96 97 to 98 99 to 100 AO and CIT(A) 7. Copies of notices issued u/s 143(2) of the Act for A.Y. 2014-15 to A.Y. 2019-20 101 to 107 AO and CIT(A) 8. Copies of notices issued u/s 142(1) of the Act for A.Y. 2014-15 to A.Y. 2018-19 108 to 117 AO and CIT(A) 9 Copy of notice dated 20.01.2021 issued u/s 142(1) of the Act for A.Y. 2019-20 along with copy of query letter for A.Y. 2013-14 to A.Y. 2019-20. 118 to 152 AO and CIT(A) 10 Copy of reply dated 01.02.2021 filed during assessment proceeding . 153 to 170 AO and CIT(A) 11 Copy of written Submission filed before CIT(A) i. A.Y. 2014-15 ii. A.Y. 2015-16 iii. A.Y. 2016-17 iv. A.Y. 2017-18 v. A.Y. 2018-19 vi. A.Y. 2019-20 171 to 200 201 to 231 232 to 300 301 to 333 334 to 366 367 to 407 CIT(A) 10. The ld. AR of the assessee in addition to the above written submission so filed vehemently argued that the assessee did not dispute the income that has been earned as commission. It is also a fact that the assessee earns income at the time when money ultimately advanced and the party who accept the money gives the commission and not by a person who give their money for financing. The documents relied upon were not found from the premises of the assessee but were found in a separate search in the case of M/s. Uttam Chand Deshraj. Two types of Printed from counselvise.com 36 ITA Nos. 975 to 980/JP/2025 Sharad Kumar Choradia vs. ACIT documents were found one as to the details of money given and taken like current account, and the other as to the details of the actual loan given. The ld. AO added commission income on both current account transactions as well as of the loan statement too. Thus, the commission income is taxed twice. As is evident from the arguments and submission made by the ld. AR of the assessee then he did not object to the commission income taxed but at the same time asking for the legitimate deduction of expenditure to earn the income. He also submitted that the lower authority calculated brokerage for 12 months. The commission cannot be given by a loan taker every time, but he gives once he accepts the loan for one time. He also submitted that the revenue relies on the documents which are found from third party and thereby the addition cannot be made in the 153A proceeding but the same is required to made as per provision of section 153C of the Act. Ld. AR of the assessee also submitted that in this case the approval of the case was given by the higher official in Mechanical way therefore, even on that aspect of the matter the order is required to be quashed. He also submitted that it is fact that no unrecorded assets or that of the jewellery were found. Even the cash found were considered as explained. Alternatively he submitted that the fair income is required to be computed in hands of the assessee Printed from counselvise.com 37 ITA Nos. 975 to 980/JP/2025 Sharad Kumar Choradia vs. ACIT looking to the fact that he has already incurred loss on account loan given through him became unrecoverable. 11. The ld DR is heard who relied on the findings of the lower authorities and more particularly advanced the similar contentions as stated in the order of the ld. CIT(A). He submitted that it is a matter of fact that the assessee has not disclosed any income in the return filed in response to notice u/s. 153A of the Act. The ld. AO has done the assessment based on the documents seized and the explanation of the assessee. The assessee has not submitted any details about the loan giver or taker and the assessee has not filed any confirmation, PAN number and no details as to when the money was taken and given back. Based on these facts ld. AO fairly estimated commission income and is based on after carefully considering the all the contentions of the assessee. As regards the claim of expenditure the assessee has not submitted any supporting evidence and there that plea is not maintainable. 12. We have heard the rival contentions and perused the material placed on record. Vide ground no.2 the assessee challenges the action of the ld. CIT(A) in confirming the addition of Rs.6,89,640/- +3,42,000= Rs. 10,31,640/- made by the Ld. AO on account of alleged unaccounted Printed from counselvise.com 38 ITA Nos. 975 to 980/JP/2025 Sharad Kumar Choradia vs. ACIT brokerage earned on the funds of M/s Uttam Chand Desraj rotated through assessee. While doing so ld. CIT(A) confirmed the action of the ld. AO in estimated the brokerage of whole year by estimating the same on the sum of total funds given during the year on various dates by ignoring the fact that actually such funds was not given on any single day but was given over a period of on the various dates of the year and also rotated periodically. Thus, the brokerage on such funds cannot be estimated for whole year. The assessee also challenges that the learned AO taxed the entire brokerage receipts without allowing the due deduction on account of expenses incurred for earning such brokerage by ignoring the established and accepted position of law that each business receipts are subject to incurring of certain expenses. Therefore, the entire receipt cannot be taxed as income and due deduction of account of expenses should be allowed. On this ground, the brief facts relating to this dispute are that in search operation one cash book was seized from the office of M/s. Uttam Chand Deshraj. Ld. AO prepared financial year wise chart showing the Payment and Receipt which is found to have been recorded for Payment for Rs. 5,74,69,500/- and Receipt for an amount of Rs. 3,12,52,990/- [ page 18 of the assessment order ]. Having done so ld. AO considering the payment made by that third party to the assessee for onward giving loan, ld. AO Printed from counselvise.com 39 ITA Nos. 975 to 980/JP/2025 Sharad Kumar Choradia vs. ACIT estimated the income on Rs. 5,74,69,500/-@ Rs. 100 per lac per month and thereby arrived at Rs. 6,89,640/- as income of the assessee [ Rs. 57,470 * 12 ]. The bench noted that the ld. AO made the jotting based on the current account found from M/s. Uttam Chand Deshraj and thereby in that process he chooses to pick up the higher amount out of payment and receipt while arriving the figure of brokerage income to be taxed. As is evident from the record that the current account shows the money given for deployment of the same for earning interest and received back either receipt of the loan amount back or that the same being not deployed. Record also reveals that the transaction recorded in the current account were also reflected in the papers found and seized from the residential premises of Monica Jain and others at Flat no. 404 Karan Upasana Residency which shows the transaction done by assessee on behalf of M/s. Uttam Chand Deshraj. While dissecting that information the ld. AO prepared a table where in the details of year wise loan given is tabulated which reads as under : Printed from counselvise.com 40 ITA Nos. 975 to 980/JP/2025 Sharad Kumar Choradia vs. ACIT Thus, based on the discussion, we note that considering the overall facts as discussed herein above for the year under consideration i.e. A. Y. 2017- 18 brokerage income as is calculated above for an amount of Rs. 11,500/- is required to be taxed. It is also a matter of record on the above table that the assessee also receives the commission while collecting the interest on those loan outstanding and thereby on that commission income is also required to be taxed. The assessee vide his submission dated 14.08.2025 admitted that aspect and the same is tabulated herein below; Amount of Amount of loan given during the year Brokerage Brokerage Subsequent Total Printed from counselvise.com 41 ITA Nos. 975 to 980/JP/2025 Sharad Kumar Choradia vs. ACIT loan given in earlier years Month in which loan given Amount No of subsequent months of the year during which the loan remained O/s after disbursement. on the amount of loan given in earlier years on account of collection of interest 1*12*0.01%) on the amount disbursed during the year on account of loan disbursed during the year (3*0.1%) brokerage on the loan amount which disbursed during the year on account of collection of interest (3*4*.01%) Brokerage of the year (5+6+7) 1 2 3 4 5 6 7 8 1,70,00,000 April-16 15,00,000 11 20,400 1,500 1,650 23,550 May-16 65,00,000 10 - 6,500 6,500 13,000 June-16 20,00,000 9 - 2,000 1,800 3,800 August-16 10,00,000 7 - 1,000 700 1,700 September- 16 5,00,000 6 - 500 300 800 1,70,00,000 Total Loan 1,15,00,000 Total of brokerage 20,400 11,500 10,950 42,850 Thus, out of the total addition of Rs. 6,89,640 plus Rs. 3,42,000/- addition of Rs. 42,850/- is required to be sustained as tabulated herein above and the balance amount is directed to be deleted and thereby ground no. 2 raised by the assessee is partly allowed. So far as ground no. 3 is concerned, the ld. AR of the assessee did not dispute the figure of income estimated for an amount of Rs. 87,430/- and for that of the matter we reproduce the following table of income placed on record by the ld. AR of the assessee; Printed from counselvise.com 42 ITA Nos. 975 to 980/JP/2025 Sharad Kumar Choradia vs. ACIT but he submitted that the against the commission income he used to have employed person for collecting the money from the parties and thereby delivery of the same is ensured. He also have to send the persons for collecting the interest and also ensure delivery of the same. All these aspects of the mater has not been considered by the ld. AO and thereby the required amount of expenditure deduction to be allowed against the following income to be charged based on the finding recorded here in above. 3. In the light of arguments put forth before the bench and according the above working in worst case the gross brokerage of the assessee on the basis of documents seized from the premises of Oswal Group as well as assessee, should be as under and the appropriate deduction on account of expenses should be allowed therefrom: - A.Y. Based on documents seized from Oswal Group Uttam Chand Desh Raj 238, Purohit Pada, Brahampuri, Jaipur Base on documents seized from Oswal Group from Flat No.- 404, Karan Upasana Residency, Peelwa Garden, Moti Doongri Road, Jaipur Based on documents seized from the assessee at his residence Total Brokerage estimated (2+3+4) 1 2 3 4 5 2014-15 0.00 1,200 0.00 1,200 2015-16 0.00 1,880 0.00 1,880 2016-17 0.00 20,480 0.00 20,480 2017-18 0.00 42,850 87,430 1,30,280 2018-19 0.00 65,700 1,46,785 2,12,485 2019-20 0.00 26,700 65,535 92,235 Total 0.00 1,58,810 2,99,750 4,58,560 Thus, considering that finding given while dealing with the ground no. 2 of the assessee and while ground no. 3 the ld. AR of the assessee did not dispute the income that has been computed by the ld. AO for an amount of Printed from counselvise.com 43 ITA Nos. 975 to 980/JP/2025 Sharad Kumar Choradia vs. ACIT Rs. 87,430/- but he submits that the reasonable expenditure is required to be deducted from the income so estimated based on the records founds in search. Now coming to the aspect of allowing the expenditure on the income required to be taxed the bench noted that the assessee vide his submission dated 14.08.2025 claimed expenditure to the extent of Rs. 7,33,440/-. The assessee in support of this contention has not placed on record any evidence supported by bills and vouchers and therefore, the same cannot be deducted. However, looking to the facts that the assessee has not incurred expenditure on the income which is to be taxed and considering the presumptive taxation provision u/s. 44AD, 44ADA or 44AE cannot be applied, but considering the nature of activity we are of the considered view that the assessee may have to incur expenditure to the extent of 75 % and thereby 25 % income be taxed as net income chargeable to tax. Based on these observations, ground no. 3 raised by the assessee is partly allowed. Ground no. 1 being technical ground and since we have considered the appeal of the assessee on the merits of the dispute ground no. 1 becomes academic at this stage. Printed from counselvise.com 44 ITA Nos. 975 to 980/JP/2025 Sharad Kumar Choradia vs. ACIT In the result, the appeal in ITA no. 978/JP/2025 filed by the assessee is partly allowed. 13. The fact of the case in ITA Nos. 975/JP/2025, 976/JP/2025, 977 JP/2025, 979/JP/2025 and 980/JP/2025 are similar to the case in ITA No. 978/JP/2025 and we have heard both the parties and persuaded the materials available on record. Therefore, we think it non-appropriate to repeat the facts, various grounds raised by the assessee and the arguments of both the parties in ITA Nos. 975/JP/2025, 976/JP/2025, 977 JP/2025, 979/JP/2025 and 980/JP/2025. Hence, we feel that the decision taken by us in ITA No. 978/JP/2025 for the Assessment Year 2017-18 shall apply mutatis mutandis in the case of assessee in ITA Nos. 975/JP/2025, 976/JP/2025, 977 JP/2025, 979/JP/2025 and 980/JP/2025 and the income shall be computed for these years as under : A.Y. Based on documents seized from Oswal Group Uttam Chand Desh Raj 238, Purohit Pada, Brahampuri, Jaipur Base on documents seized from Oswal Group from Flat No.- 404, Karan Upasana Residency, Peelwa Garden, Moti Doongri Road, Jaipur Based on documents seized from the assessee at his residence Total Brokerage estimated (2+3+4) 1 2 3 4 5 2014-15 0.00 1,200 0.00 1,200 2015-16 0.00 1,880 0.00 1,880 2016-17 0.00 20,480 0.00 20,480 2017-18 0.00 42,850 87,430 1,30,280 2018-19 0.00 65,700 1,46,785 2,12,485 2019-20 0.00 26,700 65,535 92,235 Total 0.00 1,58,810 2,99,750 4,58,560 Printed from counselvise.com 45 ITA Nos. 975 to 980/JP/2025 Sharad Kumar Choradia vs. ACIT As against this, the assessee be allowed to claim expenditure to the tune of 75 % on the nature of income as decided while dealing with the grounds of appeal vide ITA no. 978/JP/2025 and thereby the appeals of the assessee in ITA Nos. 975/JP/2025, 976/JP/2025, 977 JP/2025, 979/JP/2025 and 980/JP/2025 are partly allowed. In the result, the appeal filed by the assessee in Nos. 975 to 980/JP/2025 are partly allowed. Order pronounced in the open court on 02/09/2025. Sd/- Sd/- ¼ujsUnz dqekj½ ¼jkBkSM+ deys'k t;UrHkkbZ½ (NARINDER KUMAR) (RATHOD KAMLESH JAYANTBHAI) U;kf;d lnL;@Judicial Member ys[kk lnL; @Accountant Member Tk;iqj@Jaipur fnukad@Dated:- 02/09/2025 *Ganesh Kumar, Sr. PS vkns'k dh izfrfyfi vxzsf’kr@Copy of the order forwarded to: 1. The Appellant- Sharad Kumar Choradia, Jaipur 2. izR;FkhZ@ The Respondent- ACIT, Central Circle -02, Jaipur 3. vk;dj vk;qDr@ The ld CIT 4. vk;dj vk;qDr¼vihy½@The ld CIT(A) 5. foHkkxh; izfrfuf/k] vk;dj vihyh; vf/kdj.k] t;iqj@DR, ITAT, Jaipur 6. xkMZ QkbZy@ Guard File (ITA Nos. 975 to 980/JP/2025) vkns'kkuqlkj@ By order, lgk;d iathdkj@Asst. Registrar Printed from counselvise.com "