M/s GNA AXLES Ltd, Jalandhar V. The Asstt. Commissioner of Income-tax, Jalandhar

ITA 312/ASR/2015

• Counselvise Citation: [2016] 133 COUNSELVISE.COM (IT) 0548 (ITAT-AMRITSAR)
• Duration Of Justice: 1 year(s) 7 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 24-06-2016
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: DB
• Assessment Year: 2010-2011
• Appeal Filed On: 17-06-2015
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: A N MISRA
• Keywords: Depreciation; Search and seizure; Question of law
• Section: 143(3); 153A; 132; 15

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL AMRITSAR BENCH; AMRITSAR (CAMP AT JALANDH AR ) BEFORE SH. A.D.JAIN, JUDICIAL MEMBER AND SH. T.S. KAPOOR, ACCOUNTANT MEMBER I.T.A NO.310(ASR)/2015 ASSESSMENT YEAR: 2008-09 GNA UDYOG LIMITED 1-C, CHHOTI BARADARI, GARHA ROAD, JALANDHAR. PAN: AAACG4912C VS. ASST. CIT, CENTRAL CIRCLE-1, JALANDHAR. (APPELLANT) (RESPONDENT) I.T.A NOS. 311, 312 & 313 (ASR)/2015 ASSESSMENT YEARS: 2008-09, 2010-11 & 2012-13 GU A AXLES LIMITED 1-C, CHHOTI BARADARI, GARHA ROAD, JALANDHAR. PAN: AAACG8506C VS. ASST. CIT, CENTRAL CIRCLE-1, JALANDHAR. (APPELLANT) (RESPONDENT) APPELLANT BY: SH. GUNJEET SINGH SYAL (ADV.) RESPONDENT BY: SH. A.N.MISRA (DR) DATE OF HEARING: 21.06. 2016 DATE OF PRONOUNCEMENT:2 4.06.2016 ORDER PER T. S. KAPOOR (AM): THESE ARE FOUR APPEALS FILED BY TWO DIFFERENT ASSES SES OF THE SAME GROUP AGAINST THE SEPARATE ORDERS OF LEARNED CIT(A) , LUDHIANA DATED 27.02.2015, 20,02,2015, 27,02,2015 & 27,02,2015, FO R ASST. YEARS: 2008-09, 2008-09, 2010-11 & 2012-12 RESPECTIVELY. ITA NOS.310,311,312 & 313(ASR)/2015 ASST. YEAR S: 2008-09, 2010-11 & 2012-13 2 2. THE COMMON ISSUE IN THESE APPEALS IS INVOLVED AN D THESE WERE HEARD TOGETHER, THEREFORE, FOR THE SAKE OF CONVENIE NCE A COMMON AND CONSOLIDATED ORDER IS BEING PASSED. 3. THE BRIEF FACTS OF THE CASES AS NOTED IN THE ASS ESSMENT ORDER ARE THAT A SEARCH AND SEIZURE OPERATION U/S 132 OF THE ACT WAS CONDUCTED ON 19.01.2011 IN THE CASE OF GNA GROUP INCLUDING THE A SSESSEE COMPANIES. IN VIEW OF THE SEARCH AND SEIZURE THE CASES OF THE ASSESSES WERE REOPENED U/S 153A OF THE ACT AND DURING THE ASSESSMENT PROCE EDINGS THE ASSESSING OFFICER MADE ADDITIONS IN RESPECT OF CAR DEPRECIATION, CAR PETROL, CAR INSURANCE AND CAR REPAIR IN ALL THE YEA RS. THE ASSESSING OFFICER ALSO DISALLOWED AN AMOUNT OF RS.2,30,75/- O UT OF TRAVELLING EXPENSES IN ITA NO.310(ASR)/2015. IN ITA NO.312(ASR )/2015 BESIDES DISALLOWANCE OF CAR EXPENSES THE ASSESSING OFFICER ALSO DISALLOWED AN AMOUNT OF RS.80,953/- ON ACCOUNT OF EXPENSES INCURR ED BY LADIES OF THE FAMILY OF THE DIRECTORS. FURTHER AN AMOUNT OF RS.2, 84,963/- WAS ALSO DISALLOWED OUT OF TRAVELLING EXPENSES. IN ITA NO.31 3(ASR)/2015 AGAIN ASSESSING OFFICER DISALLOWED CAR EXPENSES AND ALSO MADE AN ADDITION OF RS.7,80,983/- OUT OF FOREIGN TOUR EXPENSES OF THE F AMILY. 4. AGGRIEVED WITH THE ASSESSMENT ORDERS THE ASSESSE E FILED APPEALS BEFORE LEARNED CIT(A), HOWEVER, THE LEARNED CIT(A) PARTLY ALLOWED RELIEF IN RESPECT OF EXPENSES INCURRED ON CAR REPAIRS AND RED UCED THE DISALLOWANCE FROM ONE FOURTH OF EXPENSES TO 1/6 TH OF EXPENSES. ITA NOS.310,311,312 & 313(ASR)/2015 ASST. YEAR S: 2008-09, 2010-11 & 2012-13 3 5. AGGRIEVED WITH THE ORDERS THE ASSESSEE IS IN APP EAL BEFORE US. 6. AT THE OUTSET, THE LEARNED AR INVITED OUR ATTENT ION TO APPEALS IN ITA NOS.310 & 311 AND WE WERE TAKEN TO GROUND NO.1( A) TAKEN IN THE APPEALS AND HE SUBMITTED THAT THE ADDITIONS MADE BY ASSESSING OFFICER IN THESE APPEALS WAS AGAINST THE LAW AS LAID DOWN B Y VARIOUS COURTS AND TRIBUNALS. EXPLAINING THE FACTS OF THE CASES THE LE ARNED AR SUBMITTED THAT THE CASES OF THE ASSESSES WERE REOPENED U/S 15 3A IN VIEW OF A SEARCH AND SEIZURE OPERATION CONDUCTED ON 19.01.201 1 AND THE ASSESSING OFFICER HAD MADE THE ADDITIONS NOT BASED UPON ANY INCRIMINATING MATERIAL FOUND DURING THE SEARCH. IT WAS SUBMITTED THAT THE ASSESSING OFFICER IN VIEW OF THE SECOND PROVISO OF SECTION 153A WAS NOT ENTITLED TO REOPEN THESE CASES AS THE ASSESSMEN T IN THESE CASES WAS NOT PENDING AND STOOD COMPLETED AND ADDITIONS IN TH ESE YEAR COULD HAVE BEEN MADE ONLY ON THE BASIS OF INCRIMINATING MATERI AL FOUND DURING THE SEARCH. THE LEARNED AR SUBMITTED THAT IN THE CASE O F MGF AUTOMOBILES LTD. VS. ACIT (DELHI) (TRIB.) IN ITA NO.4212 & 4213 /DEL/2011, VIDE ORDER DATED 28.06.2013 HAS HELD THAT IN CASE OF COMPLETED ASSESSMENTS THE ASSESSING OFFICER IS NOT ENTITLED TO MAKE ANY ADDIT ION OTHER THAN BASED UPON THE INCRIMINATING MATERIALS FOUND DURING THE S EARCH. THE LEARNED AR SUBMITTED THAT THE SAID ORDER OF THE HONBLE TRI BUNAL HAS BEEN CONFIRMED BY THE HONBLE DELHI HIGH COURT AND OUR A TTENTION WAS INVITED ITA NOS.310,311,312 & 313(ASR)/2015 ASST. YEAR S: 2008-09, 2010-11 & 2012-13 4 TO (PB PAGE 19 TO 23) WHERE A COPY OF ORDER OF HON BLE DELHI HIGH COURT IN THE CASE OF MGF AUTOMOBILES LTD. (SUPRA) WAS PLA CED. THE LEARNED AR SUBMITTED THAT ADMITTEDLY THE ADDITIONS WERE NOT BA SED UPON ANY INCRIMINATING MATERIAL AS IS EVIDENT FROM THE ORDER S OF ASSESSING OFFICER ITSELF AND THEREFORE, IT WAS ARGUED THAT THESE TWO CASES ARE COVERED CASES IN FAVOUR OF THE ASSESSEE. 7. AS REGARDS APPEAL IN ITA NO.312(ASR)/2015, THE L EARNED AR SUBMITTED THAT THOUGH ASSESSEE HAS RAISED SIMILAR L EGAL GROUND IN THIS YEAR BUT HE WAS NOT PRESSING IT AS IN THIS YEAR THE ASSESSMENT WAS PENDING. THEREFORE, HE SUBMITTED THAT GROUND NO. 1 TO 2 MAY BE DISMISSED AS NOT PRESSED. 8. THE LEARNED AR FURTHER SUBMITTED THAT HE WAS ALS O NOT PRESSING GROUND NO.3 AND THEREFORE, GROUND NO.3 MAY ALSO BE DISMISSED AS NOT PRESSED. 9. AS REGARDS GROUND NO.4, THE LEARNED AR SUBMITTED THAT THIS GROUND IS SIMILAR TO GROUND NO.2 IN ITA NO.313(ASR) /2015 AND HE WILL ARGUE IT ALONG WITH GROUND OF APPEAL IN ITA NO.313( ASR)/2015. 10. AS REGARDS ITA NO.313(ASR)/2015, THE LEARNED AR SUBMITTED THAT IN THIS APPEAL THE ASSESSEE HAS NOT RAISED THE LEGA L ISSUE AND HE FURTHER SUBMITTED THAT HE WAS NOT PRESSING GROUND NO.1 IN T HIS APPEAL AND THEREFORE GROUND NO.1 MAY BE DISMISSED AS NOT PRESS ED. ITA NOS.310,311,312 & 313(ASR)/2015 ASST. YEAR S: 2008-09, 2010-11 & 2012-13 5 11. AS REGARDS GROUND NO.2, REGARDING CONFIRMATION OF PART ADDITION @1/6 OF CAR DEPRECIATION, PETROL EXPENSES, CAR INS URANCE EXPENSES AND CAR REPAIR EXPENSES THE LEARNED AR SUBMITTED THAT T HE ADDITION U/S 153A IN RESPECT OF DISALLOWANCE OF CAR EXPENSES WAS NOT IMPOSABLE IN VIEW OF THE FACT THAT DURING REGULAR APPELLATE PROCEEDINGS BEFORE LEARNED CIT(A) THE ISSUE STANDS SQUARELY DECIDED IN FAVOUR OF ASSE SSEE. THE ASSESSING OFFICER HAD ALREADY CONSIDERED THIS ISSUE AND LEARN ED CIT(A) HAD ALREADY DELETED THE ADDITION. IT WAS FURTHER ARGUED THAT TH E ASSESSEE WAS A LIMITED COMPANY AND DIRECTORS WERE NOT ALLOWED TO U SE CAR FOR PERSONAL PURPOSES AND ASSESSEE HAS BEEN MAINTAINING ALL VOUC HERS FOR EXPENSES AND THEREFORE, AD HOC SUSTAINANCE OF DISALLOWANCE B Y LEARNED CIT(A) WAS NOT JUSTIFIED. IT WAS FURTHER SUBMITTED THAT VARIOU S HONBLE HIGH COURTS AND TRIBUNALS HAVE CONSISTENTLY DECIDED THE ISSUE I N FAVOUR OF THE ASSESSEE AND AGAINST THE REVENUE BY HOLDING THAT NO SUCH DISALLOWANCE COULD BE MADE IN THE CASE OF COMPANIES AND RELIANCE IN THIS RESPECT WAS PLACED ON THE FOLLOWING CASES LAWS. A. SAYAJI IRON & ENGG. CO. CIT (2002) 253 ITR 749 (GUJ); B. D.S. CONSTRUCTION (P) LTD. VS. ITO (1987) 29 TTJ (DEL)22; C. CIT VS. CHITRAM & CO.(P) LTD. (1991) 191 ITR 96 (MAD); D. PRITAM HOTEL (P) LTD. VS. ITO (1983) 17 TTJ (BO M) 550; E. ITO VS. ASHOKA BETELNUT CO.(P) LTD. (1984) 10 I TD 788 (MAD); F. DY. CIT VS. HARYANA OXYGEN LTD. (2001) 76 ITD 3 2 (DEL); G. PERFECT PAC LTD. VS. IAC (1993) 46 TTJ (DEL) 43 8; H. BANCO PRODUCTS (INDIA) LTD. VS. DY. CIT (1997) 63 ITD 370 (AHD) ITA NOS.310,311,312 & 313(ASR)/2015 ASST. YEAR S: 2008-09, 2010-11 & 2012-13 6 I. SONIC BICCHEM EXTRACTIONS P. LTD. VS. ITO (ITA NOS. 8136, 8138 & 8137/MUM/2011; DATED 20.03.2013) 12. THE LEARNED AR SUBMITTED THAT HIS ARGUMENTS F OR GROUND NO.4 IN ITA 312(ASR)/2015 REMAINS THE SAME. 13. THE LEARNED DR, ON THE OTHER HAND, INVITED OUR ATTENTION TO THE PROVISIONS OF SECTION 153A AND SUBMITTED THAT THE P ROVISIONS OF SECTION 153A ARE VERY CLEAR AND UNAMBIGUOUS WHICH STATES TH AT IN CASE OF SEARCH AND SURVEY ON AN ASSESSEE THE TOTAL INCOME IN RESPE CT OF EACH ASSESSMENT YEAR FALLING WITHIN SIX ASSESSMENT YEARS PRECEDING THE PREVIOUS YEAR ARE REOPENED AND ONCE THE ASSESSMENT ARE REOPENED, THE ASSESSING OFFICER IS EMPOWERED TO FRAME FRESH ASSES SMENT ORDERS. 14. AS REGARDS THE ISSUE OF DISALLOWANCE OUT OF CAR EXPENSES THE LEARNED DR HEAVILY RELIED UPON THE ORDER OF AUTHORI TIES BELOW. 15. WE HAVE HEARD THE RIVAL PARTIES AND HAVE GONE T HROUGH THE MATERIAL PLACED ON RECORD. WE FIRST TAKE UP THE LEG AL ISSUE INVOLVED IN ITA 310 & 311(ASR)2015. IT IS AN UNDISPUTED FACT THAT A SEARCH AND SEIZURE OPERATION TOOK PLACE ON THE ASSESSEE ON 19.01.2011 WHICH FALL INTO PREVIOUS YEAR 2010-11, THEREFORE, THE PROCEEDINGS O F SIX PREVIOUS YEARS IMMEDIATELY PRECEDING THE ASST. YEAR RELEVANT TO TH E PREVIOUS YEAR IN WHICH SEARCH TOOK PLACE STANDS REOPENED. IN THIS RE SPECT THE PROVISIONS OF SECTION 153A (1) (A) & (B) ARE QUIRE RELEVANT WH ICH READS AS UNDER: 153A. [(1)] NOTWITHSTANDING ANYTHING CONTAINED IN SECTI ON 139, SECTION 147, SECTION 148, SECTION 149, SECTION 151 AND SECT ION 153, IN THE CASE OF A PERSON WHERE A SEARCH IS INITIATED UNDER SECTION 132 OR BO OKS OF ACCOUNT, OTHER ITA NOS.310,311,312 & 313(ASR)/2015 ASST. YEAR S: 2008-09, 2010-11 & 2012-13 7 DOCUMENTS OR ANY ASSETS ARE REQUISITIONED UNDER SEC TION 132A AFTER THE 31 ST DAY OF MAY, 2003, THE ASSESSING OFFICER SHALL- (A) ISSUE NOTICE TO SUCH PERSON REQUIRING HIM TO FURNIS H WITHIN SUCH PERIOD, AS MAY BE SPECIFIED IN THE NOTICE, THE RETURN OF IN COME IN RESPECT OF EACH ASSESSMENT YEAR FALLING WITHIN SIX ASSESSMENT YEARS REFERRED TO IN CLAUSE (B), IN THE PRESCRIBED FORM AND VERIFIED IN THE PRESCRIBED MANNER AND SETTING FORTH SUCH OTHER PARTICULARS AS MAY BE PRESCRIBED AND THE PROVISIONS OF THIS ACT SHALL, SO FAR AS MAY BE, APPLY ACCORDINGLY AS IF SUCH RETURN WERE A RETURN REQUIRE D TO BE FURNISHED UNDER SECTION 139; (B) ASSESS OR REASSESS THE TOTAL INCOME OF SIX ASSESSME NT YEARS IMMEDIATELY PRECEDING THE ASSESSMENT YEAR RELEVANT TO THE PREVIOUS YEAR IN WHICH SUCH SEARCH IS CONDUCTED OR REQUISITI ON IS MADE: PROVIDED THAT THE ASSESSING OFFICER SHALL ASSESS OR REASSESS THE TOTAL INCOME IN RESPECT OF EACH ASSESSMENT YEAR FALLING WITHIN SUCH SIX ASSESSMENT YEARS: PROVIDED FURTHER THAT ASSESSMENT OR REASSESSMENT, IF ANY, RELATING T O ANY ASSESSMENT YEAR FALLING WITHIN THE PERIOD OF SIX AS SESSMENT YEARS REFERRED TO IN THIS [SUB-SECTION] PENDING ON THE DATE OF INITIATIO N OF THE SEARCH UNDER SECTION 132 OR MAKING OF REQUISITION UNDER SECTION 132A, AS THE CASE MAY BE, SHALL ABATE: THE ABOVE PROVISIONS OF SECTION 153A (1) READ WITH PROVISO CLEARLY EXPLAINS THAT THE ASSESSMENT OF PROCEEDINGS SIX YEA RS FROM THE YEAR IN WHICH SEARCH TOOK PLACE HAS TO BE REOPENED. HOWEVER , THE PROVISO FURTHER STATES THAT REASSESSMENT WILL BE MADE ONLY IN THOSE YEARS, WHERE THE ASSESSMENTS ARE PENDING. IN THE PRESENT YEARS ADMIT TEDLY THE ASSESSMENT ORDERS INVOLVED ARE FOR ASST. YEAR: 2008 -09 FOR ITA NOS.310 & 311(ASR)/2015. IT IS ALSO AN ADMITTED FACT THAT IN ITA NO.310(ASR)/2015 FOR ASST. YEAR: 2008-09 THE ASSESSMENT WAS COMPLETE D U/S 143(1) AND TIME PERIOD FOR ISSUING NOTICE U/S 143(2) FOR FRAMI NG REGULAR ASSESSMENT U/S 143(3) HAD EXPIRED ON 30.09.2009 AND ALSO NO NO TICE U/S 143(2) WAS EVER ISSUED BY ASSESSING OFFICER AND THEREFORE ASSE SSMENT IN ITA NO.310(ASR)/2010 WAS NOT PENDING. IN RESPECT OF ITA NO.311 THE ASSESSMENT WAS COMPLETED ON 31.12.2010 BY WAY OF RE GULAR ASSESSMENT ITA NOS.310,311,312 & 313(ASR)/2015 ASST. YEAR S: 2008-09, 2010-11 & 2012-13 8 U/S 143(3) OF THE ACT, THEREFORE, THE ASSESSMENT FO R THESE TWO YEARS STANDS COMPLETED AND THEREFORE, THE ADDITIONS IN TH ESE CASES U/S 153(A) CAN BE MADE ONLY ON THE BASIS OF INCRIMINATING MATE RIAL FOUND DURING SEARCH. THIS VIEW HAS BEEN HELD IN MANY CASES WHICH HAS BEEN RELIED UPON BY THE ASSESSEE AS LISTED IN THE WRITTEN SUBMI SSIONS FROM PAGE E TO M. OUR SPECIFIC ATTENTION WAS INVITED TO CASE LAW O F MGF AUTOMOBILES LTD. VS. ACIT (DELHI) (TRIB.) IN ITA NO.4212 & 4213 /DEL/2011 DECIDED BY HONBLE TRIBUNAL VIDE ORDER DATED 28.06.2013 IN WHI CH ONE OF THE SIGNATORY TO THIS ORDER WAS AN AUTHOR. THE SAID ORD ER OF THE TRIBUNAL HAS BEEN CONFIRMED BY HONBLE DELHI HIGH COURT, A COPY OF WHICH IS PLACED AT (PB PAGE 19 TO 23). THE HONBLE DELHI HIGH COURT HA D FRAMED THE FOLLOWING QUESTION OF LAW IN THIS CASE. DID THE ITAT FALL INTO AN ERROR IN HOLDING THE ADD ITIONS MADE IN THE CASE OF RESPONDENT ASSESSEE FOR ASST. YEAR 2004-05 AND 2005 -06 ON THE GROUND THAT NO INCRIMINATING MATERIAL WAS FOUND DURING SEA RCH CONDUCTED IN THE ASSESSEES PREMISES ON 12 TH SEMPTERM 2007 IN RESPECT OF ITS CLAIMS. THE HONBLE DELHI HIGH COURT HAS ANSWERED THIS QUES TION IN PARA 11 TO 16 IN FAVOUR OF ASSESSEE. FOR THE SAKE OF CONVENIEN CE THE SAME IS REPRODUCED BELOW. 11. THIS COURT HAS HEARD THE SUBMISSIONS OF MR. N. P. SAHNI, LEARNED SENIOR STANDING COUNSEL FOR THE REVENUE AND MRS. PREM LATA BANSAL, LEARNED SENIOR COUNSEL FOR THE RESPONDENT ASSESEE. 12. TO BEING WITH, WHAT IS STRIKING IS THE FACT THA T NOWHERE IN THE ASSESSMENT ORDERS FOR THE AYS IN QUESTION HAS THE AO NOTED THE S TARK FACT THAT THE MATERIAL PURPORTEDLY SEIZED BY THE REVENUE DURING THE SEARCH WAS COMPLETELY AND IRRETRIEVABLY DESTROYED IN A FIRE THAT TOOK PLACE O N 6 TH OCTOBER 2007 IN MAJUR BHAWAN. WHILE A PHOTOCOPY OF THE PANCHANAMA SHOWIN G WHAT WAS SEIZED IS AVAILABLE, THE MATERIAL ITSELF IS NOT AND IN FACT W AS NOT AVAILABLE WITH THE AO WHEN THE ASSESSMENT PROCEEDINGS, CONSEQUENT UPON THE SEA RCH, TOOK PLACE. FURTHER, AS NOTED BY THE ITAT, NO STATEMENT UNDER SECTION 132(4) WAS RECORDED DURING THE ITA NOS.310,311,312 & 313(ASR)/2015 ASST. YEAR S: 2008-09, 2010-11 & 2012-13 9 SEARCH. THEREFORE, THERE WAS NO MATERIAL, MUCH LESS ANY INCRIMINATING MATERIAL, RECOVERED DURING THE SEARCH WHICH COULD FORM THE BA SIS OF THE AOS ASSESSMENT ORDER IN TERMS OF SECTION 153A OF THE ACT. 13. CONSEQUENTLY, THE COURT IS UNABLE TO APPRECIATE ON WHAT BASIS THE AO HAS IN THE ASSESSMENT ORDERS FOR THE AYS IN QUESTION PRO CEEDED TO DISCUSS THE FACTS RELATING TO THE SALE OF LAND BY THE ASSESSEE IN THE AY 2007-08 AND CONCLUDE THAT THE ASSESSEE AS AN AMALGAMATED COMPANY FAILED TO COM PLY WITH THE REQUIREMENTS OF SECTION 72-A(2)(B) (I) OF THE ACT. THE COURT ENQUI RED FROM MR. SAHNI WHETHER THERE IS ANY INDICATION ANYWHERE IN THE ASSESSMENT ORDERS THAT THE INFORMATION REGARDING THE LAND OF CML HAVING BEEN SOLD BY THE AS SESSEE DURING THE AY 2007- 08 WAS OBTAINED AS A RESULT OF ANY MATERIAL GATHERE D DURING THE SEARCH OR ANY INFORMATION OBTAINED DURING THE SEARCH. MR. SAHNI C ANDIDLY ANSWERED IN THE NEGATIVE. 14. MR. SAHNI VOLUNTEERED THAT IT SHOULD HAVE BEEN POSSIBLE FOR THE REVENUE TO RESORT TO SECTIONS 147/148 OF THE ACT AND RE-OPENED THE ASSESSMENTS ON THE BASIS OF THE INFORMATION RECEIVED REGARDING THE SALE BY T HE ASSESSEE OF THE LAND OF CML DURING AY 2007-08. THE COURT CONSIDERS THE SAID SUBM ISSION TO BE HYPOTHETICAL SINCE THE FACT REMAINS THAT THE REVENUE HAS THOUGHT IT FIT TO RESORT TO A SEARCH IN TERMS OF SECTION 132 OF THE ACT FOLLOWED BY PROCEEDI NGS UNDER SECTION 153A(1) OF THE ACT. AS FAR AS THE COURT IS CONCERNED, IN THESE P ROCEEDINGS, IT IS CALLED UPON TO DECIDE THE LEGALITY OF THE ASSESSMENT ORDERS PASSED UNDER SECTION 153 A OF THE ACT. 15. THE INESCAPABLE CONCLUSION THEREFORE IS THAT TH E AO PROCEED TO FRAME ASSESSMENTS UNDER SECTION153A OF THE ACT RELYING ON S OME INFORMATION NOT UNEARTHED DURING THE SEARCH. FURTHER, WHATEVER WAS RECOVERED DURING THE SEARCH HAVING BEEN DESTROYED IN A FIRE WAS NOT AVAILABLE W ITH THE AO WHEN HE FRAMED THE ASSESSMENTS. CONSEQUENTLY, THE ASSESSMENT ORDER PASSED WITH REFERENCE TO SECTION 153A (1) OF THE ACT WERE UNSUSTAINABLE IN LAW . 16. QUESTION (I) FRAMED BY THE COURT IS ANSWERED IN THE AFFIRMATIVE, I.E., IN FAVOUR OF THE ASSESSEE AND AGAINST THE REVENUE. QUEST ION (II) IS ANSWERED IN THE NEGATIVE, I.E., BY HOLDING THAT ADDITIONS AS ORDERE D BY THE AO WERE NOT WARRANTED IN THE FACTS AND CIRCUMSTANCES. THE FACTS AND CIRCUMSTANCES OF THE PRESENT CASES AR E PARI MATERIAL TO THE FACTS AND CIRCUMSTANCES OF THE CASE LAWS OF M/S MGF AUTOMOBILES LTD.(SUPRA) RELIED UPON BY LEARNED AR AND THEREFORE , RESPECTFULLY FOLLOWING THE ABOVE JUDICIAL ORDER AND OTHER ORDERS RELIED UPON BY LEARNED AR WE ALLOW GROUND NO.1(A) OF THE APPEALS IN ITA 31 0 & 311(ASR)/2015 AND WE QUASH THE ASSESSMENT ORDERS IN THESE YEARS A S ADDITIONS IN THESE CASES HAS BEEN MADE IN THE ABSENCE OF INCRIMINATING MATERIAL. ITA NOS.310,311,312 & 313(ASR)/2015 ASST. YEAR S: 2008-09, 2010-11 & 2012-13 10 16. IN VIEW OF THE GROUND NO.1(A) IS ALLOWED IN THE SE TWO APPEALS. 17. SINCE, WE HAVE DECIDED THE JURISDICTIONAL ISSUE IN FAVOUR OF ASSESSEE AND NOTHING REMAINS TO BE ADJUDICATED AND IN VIEW OF THE ABOVE APPEALS IN ITA NOS.310 & 311(ASR)/2015 ARE ALLOWED. 18. NOW COMING TO ITA NO.312 & 313(ASR)/2015 THE LE ARNED AR HAS PRESSED ONLY FOURTH GROUND IN ITA NO.312 AND SECOND GROUND IN ITA NO.313 WHICH IS THE ACTION OF LEARNED CIT(A) BY WHI CH HE HAD RESTRICTED THE DISALLOWANCE ON ACCOUNT OF CAR EXPENSES @ 1/6 TH OF THE TOTAL EXPENSES. WE FIND THAT THE ASSESSEE IS A LIMITED CO MPANY AND ITS ACCOUNTS ARE AUDITED. THE ASSESSING OFFICER DID NOT FIND ANYTHING ADVERSE ON THE VOUCHERS AND BOOKS OF ACCOUNTS AND M ADE AD HOC DISALLOWANCE @ 25% OF EXPENSES WHICH THE LEARNED CI T(A) RESTRICTED UP TO 1/6 TH OF THE EXPENSES. AS THE AUTHORITIES BELOW DID NOT FIND ANYTHING WRONG IN THE VOUCHERS OR BOOKS OF ACCOUNTS, THE AD HOC ADDITION IS NOT JUSTIFIED. WE FIND THAT IN A NUMBER OF CASES RELIED UPON BY LEARNED AR, IT HAS BEEN HELD THAT IN THE CASE OF COMPANIES NO SUCH DISALLOWANCE CAN BE MADE. THE HONBLE ITAT MUMBAI BENCHES IN ITA NO.220 2/MUM/2013 FOR ASST. YEAR: 2006-2007 VIDE ITS ORDER DATED 31.0 5.2016 UNDER SIMILAR FACTS AND CIRCUMSTANCES HAS HELD AS UNDER: 38. WE HAVE CONSIDERED RIVAL CONTENTIONS AND FOUND THAT AO HAS DISALLOWED SUO MOTU ESTIMATED 10% ON ACCOUNT OF PERSONAL USE OF CA R BY THE DIRECTOR. THE ASSESSEE IS A CORPORATE ENTITY, THEREFORE, IN VIEW OF THE DECISION OF HONBLE GUJRAT HIGH COURT IN THE CASE OF OF SAYAJI IRON & ENGG. CO . 253 ITR 749, NO DISALLOWANCE ON THE PLEA OF PERSONAL USE CAN BE MADE IN THE CASE OF CORPORATE ENTITY. ACCORDINGLY, WE DIRECT THE AO TO DELETE THE SAID DISA LLOWANCE. ITA NOS.310,311,312 & 313(ASR)/2015 ASST. YEAR S: 2008-09, 2010-11 & 2012-13 11 19. IN VIEW OF THE ABOVE, GROUND NO.4 IN ITA NO.312 AND GROUND NO.2 IN ITA NO.313 ARE ALLOWED. 20. THE LEARNED AR HAD NOT PRESSED GROUND NO.1, 2 & 3 IN ITA NO.312, THEREFORE, SAME ARE DISMISSED AS NOT PRESSED. 21. SIMILARLY, IN ITA NO.313, THE LEARNED AR DID NO T PRESS GROUND NO.1, THEREFORE, THE SAME IS DISMISSED AS NOT PRESS ED. 22. IN VIEW OF THE APPEALS IN ITA NO.312 & 313(ASR) /2015 ARE PARTLY ALLOWED. 23. IN NUTSHELL, THE APPEALS IN ITA NOS.310& 311(AS R)2015 ARE ALLOWED WHEREAS THE APPEALS IN ITA NO.312 & 313(ASR)/2015 A RE PARTLY ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT ON 24 TH JUNE, 2016. SD/- SD/- (A.D. JAIN) (T. S. KAPOOR) JUDICIAL MEMBER ACCOUNTANT MEMBER DATED: 24.06.2016. /PK/ PS. COPY OF THE ORDER FORWARDED TO: (1) THE ASSESSEE: (2) THE (3) THE CIT(A), (4) THE CIT, (5) THE SR DR, I.T.A.T., TRUE COPY BY ORDER