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TMI Blog2009 (9) TMI 615X X X X Extracts X X X X X X X X Extracts X X X X ..... hed - penalty under s. 158BFA not leviable – Appeal allowed X X X X Extracts X X X X X X X X Extracts X X X X ..... mstances of the case the AO ought not to have assessed undisclosed income on the basis of bank deposits which the appellant had already considered and offered the relevant income for tax in the asst. yrs. 1998-99 and 1999-2000 by filing voluntary returns much prior to the search in the case of search warrantee. 5. That without prejudice to the generality of the ground No. 3 above, the learned CIT(A) Central has erred and was not justified on facts and in law in ignoring the alternative submission/plea/defense of the assessment proceedings, which he had also noted in the proceeding that in any case it is the peak credit basis, on which such undisclosed income had to be computed and taxed. 6. That without prejudice to the generality of the ground No. 3 above, the learned CIT(A) Central has erred and was not justified on facts and in law in ignoring/escaping, amongst other decisions, the direct applicable binding precedent in Manoj Aggarwal vs. Dy. CIT (2008) 117 TTJ (Del)(SB) 145 : (2008) 113 ITD 377 (Del)(SB) case, copy of which was placed on record along with the quoting the relevant headnotes and catchnotes and gist as regards to the existence of satisfaction under s. 158BD and ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... , which were patent and obvious but remained unconsidered/undecided which were raised, submitted and discussed before him. He ought to have in the facts and in the circumstances of the case, accepted and allowed the application under s. 154 filed before him against the appellate order dt. 14th Oct., 2008 in appeal No. 125/2008-09 decided by him. 2. That in the facts and in the circumstances of the case, in view of the material available on record of the learned CIT(A) Central, Jaipur and applying thereto the relevant and obvious facts and applicable obvious provisions of law and also applicable judicial pronouncements the learned CIT(A) Central has grossly erred in law and in facts in not accepting the fact that he had omitted to discuss and consider and had forgotten to give his findings on the alternate pleading of considering the well recognized principle of applying the peak credit theory wherever, it is applicable. 3. That the learned CIT(A) Central, Jaipur is wrong and unjustified in giving finding at p. No. 2 under the head para 2(iv) of petition under s. 154 that. 'However, there is no effect in any manner in the merit of the case as the reasons recording always precedes ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... k of Baroda amounted to Rs. 4,26,189 during the entire block period and the deposits made in SBBJ account aggregated to Rs. 11,12,131 for the entire block period. The jurisdiction of this case was transferred from Addl. CIT, Range III, Jodhpur to Asstt. CIT, Central Circle 1, Jodhpur vide notification dt. 20th Feb., 2003 and the same stood communicated to the assessee on 26th Feb., 2003. 5. The AO of the appellant thereafter recorded satisfaction on 5th July. 2005 and issued notice under s. 158BD of IT Act requiring the assessee to file return of undisclosed income of the block period. The satisfaction recorded in the case of the appellant is reproduced as under: "A search under s. 132(1) of IT Act was conducted at the business premises of M/s Chemicals and Minerals Industries (P) Ltd., Jodhpur and at the residence of directors and employees of the company on 20th Dec., 2002. Shri Vijay Raj Khariwal was finance manager of this company was the person who managed all types of planning related to tax payment/tax evasion of the company. Shri Khariwal kept various types of records of the company/other employees which were not in the type of regular books of account but some documents ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... lete the assessment of undisclosed income on account of unexplained deposits in the two bank accounts, ex parte under s. 144 r/w s. 158BD of IT Act on 24th July, 2007 at an income of Rs. 15,38,320. 7. The learned CIT(A), allowing relief of Rs. 2,38,722 on account of entries relatable to asst. yr. 1996-97 beyond the block period reduced the assessment of undisclosed income to Rs. 13,00,598 vide his order dt. 14th Oct., 2008. The assessee's application for rectification with respect to narration of certain facts stood accepted but assessee's application pointing out error in quantum appeal and applying peak credits, stood rejected and appeals stood disposed of on 25th March, 2009 against which separate appeal has also been filed. The consequential penalty under s. 158BFA(2) of IT Act also stood upheld against which the assessee has come in appeal separately against the order dt. 14th Oct., 2008 of learned CIT(A). In this order, penalty computed was considered as justified. 8. We have heard the parties and have carefully perused the material on record with reference to following judgments and sub-r. (6) of r. 18 of ITAT Rules, 1963. (i) Manish Maheshwari vs. Asstt. CIT & Anr. (2007 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n other than the person with respect to whom search was made under s. 132 or whose books of account or other documents or any assets were requisitioned under s. 132A then, the books of account other documents or assets seized or requisitioned shall be handed over to the AO having jurisdiction over such other person and that AO shall proceed against such other person and the provisions of this chapter shall apply accordingly." 10. Hon'ble apex Court in the case of Manish Maheshwari vs. Asstt. CIT & Anr. has explicitly elaborated the conditions precedent for invoking the block assessment as under: "The condition precedent for invoking a block assessment is that a search has been conducted under s. 132 or documents or assets have been requisitioned under s. 132A. The said provision would apply in the case of any person in respect of whom search has been carried out under s. 132A or documents or assets have been requisitioned under s. 132A. Sec. 158BD, however, provides for taking recourse to a block assessment in terms of s. 158BC in respect of any other person, the conditions precedent wherefore are (i) satisfaction must be recorded by the AO that any undisclosed income belongs to ..... X X X X Extracts X X X X X X X X Extracts X X X X
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