Tax assessments quashed for lack of evidence, reduced ad-hoc disallowance, relief granted to assessee.

The Tribunal quashed assessments for the years 2009-2010 to 2012-2013 due to the absence of incriminating material found during the search. Ad-hoc disallowance of expenses related to films, drugs, chemicals, and staff salaries was reduced to 10% for the years 2013-2014 to 2015-2016. The appeals were partly allowed, granting relief to the assessee on the issue of assessments under section 153A without incriminating documents.

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Issues Involved:
1. Legality of assessment orders passed under section 153A without incriminating documents.
2. Timeliness of assessment orders.
3. Validity of assessments under section 144.
4. Ad-hoc disallowance of expenses.
5. Admission of additional grounds regarding lack of prior approval under section 153D.

Detailed Analysis:

Legality of Assessment Orders Passed under Section 153A without Incriminating Documents:
The primary issue contested was whether assessments under section 153A could be made without any incriminating documents found during the search. The Tribunal noted that the assessee's original returns for the years 2009-2010 to 2012-2013 were filed and assessed before the search conducted on 28.05.2014. It was observed that no incriminating documents were found during the search. The Tribunal relied on precedents, including the Delhi High Court's decision in *Kabul Chawla*, which held that in the absence of incriminating material, no additions could be made in assessments under section 153A for years where assessments were already completed. Consequently, the Tribunal quashed the assessments for the years 2009-2010 to 2012-2013.

Timeliness of Assessment Orders:
The assessee argued that the assessment orders were barred by limitation, as they were dispatched beyond the prescribed date. However, this ground was not pressed by the assessee during the hearing, and thus, it was dismissed by the Tribunal.

Validity of Assessments under Section 144:
The assessee contended that the assessment orders under section 144 were invalid as the provisions of sections 142(1) and 143(2) were complied with during the assessment proceedings. This ground was also not pressed by the assessee, leading to its dismissal.

Ad-hoc Disallowance of Expenses:
The Tribunal addressed the issue of ad-hoc disallowance of 20% of expenses related to films, drugs, chemicals, and staff salaries. The assessee's non-compliance during assessment proceedings led to this disallowance. However, upon appeal, the Tribunal, considering the nature of the profession and the submissions made, restricted the disallowance to 10% for the years 2013-2014 and 2014-2015, and similarly for the year 2015-2016.

Admission of Additional Grounds Regarding Lack of Prior Approval under Section 153D:
The assessee raised additional grounds regarding the lack of prior approval under section 153D, claiming that the approval mentioned in the assessment order was not valid. However, these additional grounds were not pressed during the hearing and were consequently dismissed by the Tribunal.

Conclusion:
The Tribunal quashed the assessments for the years 2009-2010 to 2012-2013 due to the absence of incriminating material found during the search. For the years 2013-2014 to 2015-2016, the Tribunal restricted the ad-hoc disallowance of expenses to 10%. The appeals were partly allowed, providing relief to the assessee on the primary issue of assessments under section 153A without incriminating documents.

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