I. T. AS. NOS. 10256/LB OF 1991-92 AND 3244/LB OF 1994 VS I. T. AS. NOS. 10256/LB OF 1991-92 AND 3244/LB OF 1994
1997 P T D (Trib.) 2067
[Income-tax Appellate Tribunal Pakistan]
Before Iftikhar Ahmad Bajwa, Accountant Member and
Malik Muhammad Tauqir Afzal, Judicial Member
I.T.As. Nos. 10256/LB of 1991-92 and 3244/LB of 1994, decided on 29/01/1996.
Income Tax Ordinance (XXXI of 1979)---
----S. 13(1)(d)---Addition---Validity---History of case ---Value---Assessee returned sales but I.T.O: rejected accounts with routine observations---Prior to years under appeal assessments were completed under Self-Assessment Scheme---Considering history of case, estimate of sales for years under appeal was excessive---Entire sales were verifiable and almost all sales were on credit---Sales were reduced considerably in view of the history of the case ---G.F. rate being in line with past history, did not call for interference- -Add backs on basis of remote assessment were apparently unjustified and were ordered to be deleted by Tribunal in circumstances.
Farkh Naeem, I.T.P. for Appellant.
Zafar Ahmed, D.R. for Respondent.
Date of hearing: 29th January, 1996.
ORDER
IFTIKHAR AHMAD BAJWA (ACCOUNTANT MEMBER).---In the two appeals relating to assessment years 1990-91 and 1991-92 additions in trading as well as P&L account are being contested.
2. Appellant, a Registered Firm, derived income from manufacturing and sale of Achar, Chatni and Muraba. For the two years the position of trading accounts was under:---
| A/Y | Declared | Assessed | Fixed in Appeal |
| 1990-91 | Sales9,67,953 | 11,50,000 | 11,50,000 |
| | GP Rate 18.60 % | 20 % | 20 % |
| 1991-92 | Sales. 10,61,041 | 13,00,000 | 12,50,000 |
| . | GP Rate 17.57 % | 20 % | 20 % |
The accounts were rejected with routine observations and estimate of sales as well as the GP rate of 20% for the two years was stated to be as per history of the case. For assessment year 1990-91, the-estimate of sales was upheld by the CIT(A) mainly on the ground that the sales had not shown any improvement over the preceding few years while in be next year the CIT (Appeals) found the estimate of sales to be somewhat excessive and reduced the same by a small margin. For assessment years 1980-81 to 1989-90 assessments were completed under the self-assessment scheme. For the earlier years, the positions of sales declared and assessed was as under: --
| A/Y | Declared | Assessed |
| 1975-76 | 4,15,227 | 4,20,000 (As per Tribunal's Order) |
| 1976-77 | 5,79,271 | 5,85,000(As per Tribunal's Order) |
| 1977-78 | 5,08,325 | 5,15,000(As per Tribunal's Order) |
| 1978-79 | 4,10,640 | 4,25,000(As per Tribunal's Order) |
| 1979-80 | 6,00,250 | 6,50,000(As per Tribunal's Order) |
Considering the history of the case, estimate of sales for the years under appeal was indeed excessive. It was pointed out by appellant's Authorised Representative that the entire sales during the period under appeal were verifiable and almost 99% of the sales were on credit. List of sales for the two years were produced on the date of hearing. The DR was unable to point out any unverifiable sales in these lists. According to the AR, even the ITO had been unable to find any unverifiable sales during the course of assessment proceedings. Considering the past history and circumstances of the case, the sales for assessment years 1990-91 and 1991-92 are reduced to Rs.10,00,000 and Rs.11,00,000. The rate of profit was in line with the past history and does not call for any interference. The addition in the trading account would be modified accordingly.
3. So far as P&L expenses are concerned, the expenditure claimed under the head "packing expenses" for assessment year 1990-91 was totally disallowed whereas in assessment year 91-92, 50% of the claim was disallowed. The CIT(A) restricted the addition to 50% for assessment year 1990-91 while the disallowance for assessment year 1991-92 was maintained. Complete details of the expenses under this head were available with the appellant. The add backs on the basis of a remote assessment were apparently unjustified and are, therefore, deleted. The add backs under other heads do not call for any interference.
4. The appeal succeeds as above.
C.M.S./305/Trib. Order accordingly.