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A N PAHUJA: The cross-appeals in IT(SS)A No. 194/Ahd/2006 filed by the Revenue and IT(SS)A No.202/Ahd/2006 filed by the assessee directed against an order dated 30-03-2006 of the learned CIT(A)-III, Ahmedabad while the appeal in ITA No. 212/Ahd/2006 by the assessee against an order dated 12- 7-2006 of the learned CIT(A)-I, Ahmedabad, raise a number of grounds.

2. Since common issues are involved, these appeals were heard together for the sake of convenience and are being disposed of through this common order. The Revenue in their appeal in IT(SS)A No. 194/Ahd/2006 have raised issues M/s. Purnima Angadia Services relating to admission of additional evidence by the learned CIT(A) in contravention of Rule 46A of the Income- tax Rules, 1962 and lack of sufficient opportunity provided by the learned CIT(A) apart from deletion of addition of addition of Rs.21,38,000/- u/s 68 of the Income Tax Act, 1961 (hereinafter referred to as the 'Act'). In the appeal in IT(SS)A No.212/Ahd/2006, the Revenue have raised grounds relating to cancellation of penalty of Rs.17,13,600 levied u/s 158BFA (2) of the Act. The assessee in their appeal has raised a number of grounds relating to issue of notice u/s 158BD of the Act while other three grounds relate to addition of Rs.4,00,000/- on account of exaggerated khep income , Rs.2,02,000/- on account of cash belonging to customers and Rs.60,000/- on account of cash deposits from small depositors besides levy of surcharge on the tax determined in pursuance to block assessment. 


M/s. Purnima Angadia Services
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4. At the outset, the learned Counsel on behalf of the assessee submitted that facts and issue raised in the aforesaid ground are squarely covered by the decision dated 3.7.2009 of the ITAT in the case of M/s Rajesh Kumar Ramesh & Co. in ITSS(A) no.165/Ahd./2006,wherein following the decision of Special Bench of Tribunal in the case of Manoj Aggarwal v. DCIT (2008) 113 ITD 377 (Del), the ITAT quashed the block assessment. The ld. DR did not dispute these submissions of the ld. AR. The impugned orders reveal that the assessee is engaged in the business of angadia. A search action u/s 37(3) of FEMA Act, 1999 was carried out by the Enforcement Directorate on the luggage van of Ashram Express on 9-7-2001, taken on lease by Shri Jagdish Gujjar and Prabhu G. Jadhav. The search of baggage/parcels in the luggage van resulted in seizure of valuables like Indian currency, gold biscuits, silver bars, diamonds, jewellery (imported) etc. The cash, bullion and jewellery worth Rs.3,34,89,705/- were seized and inventoried vide Panchnamas done by ED officials separately in the names of various angadias, from whose baggage the assets were seized .

Subsequently, block assessment u/s 158BC of the Act was framed in the case of Shri Jagdish Gujjar and Prabhu G. Jadhav on 31-7-2003 and consequently a notice u/s 158BD of the Act was issued to the assessee on 30.7.2004 . In response, the assessee filed return declaring nil undisclosed income on 12-08- 2004. The assessee during the course of assessment proceedings vide letter dated 22.12.2004 submitted that out of cash of Rs.28,00,000/- belonging to it, Rs.25,00,000/- belonged to the firm and Rs.3,00,000/- belonged to 8 other persons. Since the assessee failed to produce their books of accounts before the AO nor explained the source of cash, the said amount was assessed as unaccounted income vide order dated 1.3.2005. On appeal, the ld. CIT(A) allowed part relief. In view of these facts, the learned counsel on behalf of the assessee stated that the notice u/s.158 BC r. w. s. 158BD of the Act issued on 30-07-2004 is barred by limitation in view of the decision of Special Bench of M/s. Purnima Angadia Services Tribunal in the case of Manoj Aggarwal v. DCIT (2008) 113 ITD 377 (Del). We find from the above facts and circumstances, that the issue is squarely covered in favour of the assessee and against the Revenue by the decision of ITAT Delhi Special Bench in the case of Manoj Aggarwal (supra), wherein the Tribunal held on this issue as under:-

M/s. Purnima Angadia Services "5. In view of the above facts and circumstances, we find that a search action u/s 37(3) of FEMA Act, 1999 was carried out by the Enforcement Directorate on the Luggage Van of Ashram Express on 9-7-2001 taken on lease by Shri Jagdish Gujajr and Prabhu G.Yadhav. The assessee is engaged in the business of angadia. The search of baggage's/parcels in the luggage van resulted into seizure of valuables like Indian currency, gold biscuits silver bard, diamonds, jewellery (imported) etc. The cash, bullion and jewellery worth Rs.3,34,89,705/- were seized and inventoried vide Panchnamas done by ED officials separately in the names of various angadias from whose baggage the seized assets were found. The block assessment proceedings u/s 158BC was started in the case of Shri Jadish Gujjar and Prabhu G Jadhav and block assessment was framed u/s 158BC vide order dated 31-07-2003. The assessee was one of them and consequently, proceedings u/s 158BD of the Act was initiated in the case of the assessee. The assessee filed its return of income dated 21-9-2004 declaring undisclosed income at NIL in response to the notice issued u/s 158BD dated 12-4-2004, which was served on 17-4-2004. It means that, the block assessment proceeding in the case of the assessee u/s.158BD of the Act was taken after more than three years from the date of search.