COMMISSIONER OF INCOME-TAX, CENTRAL ZONE `C', KARACHI VS MESSRS BAWANY INDUSTRIES LIMITED, KARACHI
1991 P T D 385
[Karachi High Court]
Before Saleem Akhtar and Muhammad Aslam Arain, JJ
COMMISSIONER OF INCOME-TAX, CENTRAL ZONE `C', KARACHI
versus
Messrs BAWANY INDUSTRIES LIMITED, KARACHI
Income-tax Reference No.35 of 1982, decided on 14/01/1991.
Income-tax Act (XI of 1922)---
----S. 1360)---Reference---Only such question could be referred to the High Court which had arisen from the order of the Tribunal---Where question sought to be raised in reference was never agitated till the appeal was decided by the Tribunal, such question, held, would not be considered as arising from the order of the Tribunal.
Nasrullah Awan for Applicant.
Date of hearing: 14th.Ianuary, 1991.
JUDGMENT
SALEEM AKHTAR, J.---This reference relates to assessment year 1973-74. The Income-tax Officer framed assessment under section 23(3) of the Income-tax Act against which an appeal was filed before the Appellate Assistant Commissioner who allowed the appeal granting relief to the petitioner holding that Income-tax Officer was not justified in rejecting the trading results on account of the claim of excessive wastage and the addition of Rs.39,19,566 was accordingly deleted. The Department then filed appeal before the Tribunal which was dismissed with the following observations:--
"In such a contingency instead of making a leap in the dark, the assessing officer can justifiably take aid from the formula evolved by experts. In the present case no specific instances of under-statement of purchases or omission of sales were pointed out, and the observations about the inflation in wages and stores were common to both the units and, therefore, it was not fair to accept result's in one and reject in the other Again it is not to be forgotten that while Nazir Committee formula refers to the minimum expected production, the Awan Committee formula works out ideal production. Therefore, the assessing officer definitely went wrong in working out production on the basis of one formula for count upto 14 and on another for count 16 and above. In the result, we find that the insinuation about shortfall in production in the old unit was unwarranted because (1) the percentage of wastage at 14.90% was not only better compared to last year, (ii) compared favourably with the minimum allowable by the Nazir Committee at 21%, and (iii) percentage accepted by the assessing officer in this very year in this very case, while dealing with the new unit. We, therefore, see no error in the decision by the learned Appellate Assistant Commissioner who rightly discarded the additions which were made on flimsy grounds."
The Department then filed application under section 136(1) for reference of the following question to the High Court.
"Whether on the facts and in the circumstances of the case the learned Income-tax Appellate Tribunal was justified to delete the entire addition of Rs.39,19,566 made to the trading account without adjudicating the issue of cash credits of Rs.21,17,350 which were not added to the income separately in view of addition to the trading account."
The Tribunal dismissed the application holding that the question sought to be referred did not arise from the order of the Tribunal. We have heard Mr. Nasrullah Awan. We have also perused the order of the Tribunal and find that the question sought to be referred was never agitated before the Tribunal. It is significant to note that the question has been framed in a manner that the finding of the Tribunal has been accepted. The finding of the Tribunal is that this issue was never raised either before the Appellate Assistant Commissioner or before the Tribunal. Under section 136(1) only such question can be referred to the High Court which arises from the order of the Tribunal. The question sought to be raised was never agitated till the appeal was decided by the Tribunal. Therefore, this question does not arise from the order of the Tribunal. We, therefore, dismiss the application.
M.BA./C-179/KApplication dismissed.