TMI Blog1995 (2) TMI 111X X X X Extracts X X X X X X X X Extracts X X X X ..... there is another ground raised in respect of an addition of Rs. 30,274 which was restored by the Deputy Commissioner (Appeals) to the file of the Assessing Officer. The learned counsel at the outset stated that he was under instructions not to press ground No. 2 in assessment year 1984-85 and this Is accordingly being rejected. 3. In respect of the common issue raised in all the three years the Assessing Officer noted during the course of the assessment proceedings that in a statement recorded on oath on 13th June, 1988 with reference to provisions of section 132(5) of the Income-tax Act, 1961 the assessee had categorically admitted that he was using the company's car for official as also personal purposes. The relevant question-answers ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... invited during the course of the hearing. The learned counsel for the assessee reiterated the arguments advanced before the lower authorities placing reliance on the orders passed by the Deputy Commissioner (Appeals) for assessment years 1980-81, 1981-82, 1982-83 and 1983-84 deleting the addition on account of car perquisite. It was submitted that an identical addition had been deleted by the first appellate authority in the aforesaid preceding assessment years. According to the learned counsel, the resolution of the Board of Directors authorised only the payment of a consolidated remuneration of Rs. 4,000 monthly and no mention was made of any perquisite in respect of the use of company's car for private purposes. It was canvassed that pe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... that the assessee was sanctioned remuneration at Rs. 4,000 per month consolidated with effect from 1st October, 1977 in his capacity as the Managing Director of the company M/s. MAC AIR (P.) Ltd. It is also not disputed that in assessment years 1980-81 to 1983-84 a similar addition was deleted by the Deputy Commissioner (Appeals) but as rightly contended by the Departmental Representative the facts were somewhat different and the first appellate authority took the view that such an addition could not be made on surmises and conjectures. According to him, during the assessment years under consideration action under section 132(5) had been taken note of and which was also confirmed by the Commissioner in an order passed under section 132(12). ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ompany is being run by the Board of Directors, which is headed by the assessee as a Managing Director. In other words, the person who runs the company and who authorises day-to-day actions and the person who is supposed to be using the car and which in this case is stated to be unauthorised, is one and the same. In the case before the Hon'ble Madras High Court the question was somewhat different as the assessee who was the Managing Director of a private limited company was depositing his income from various sources in an account with the company and from time to time was also withdrawing funds from the same account which resulted in substantial debit balances. It was further noted that the company was borrowing moneys in respect of which it ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tionship of a debtor and creditor between the assessee and the company and the non-liability to pay interest on the over-drawings as not being the result of any employer-employee relationship. On the foregoing reasons the Tribunal held that section 17(2)(iii) was also not attracted. At the instance of the revenue a question was referred for the opinion of the Hon'ble High Court vis-a-vis the provisions of section 17(2) of the Income-tax Act, 1961. On the applicability of section 17(2)(iv), their Lordships upheld the view taken by the Tribunal but proceeded to reject the submissions made on behalf of the assessee vis-a-vis provisions of section 17(2)(iii) and on the facts of the case their Lordships opined that the assessee was granted a " b ..... X X X X Extracts X X X X X X X X Extracts X X X X
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