I.T.AS. NOS.1976/LB OF 1992-93, 4515/LB OF 1994, 6007/LB, 6008/LB AND 6009/LB OF 1995 VS I.T.AS. NOS.1976/LB OF 1992-93, 4515/LB OF 1994, 6007/LB, 6008/LB AND 6009/LB OF 1995
1997 P T D (Trib.) 2098
[Income-tax Appellate Tribunal Pakistan]
Before Ahsan Alam, Accountant Member and
Ch. Muhammad Ishaque, Judicial Member
I.T.As. Nos. 1976/LB of 1992-93, 4515/LB of 1994, 6007/LB, 6008/LB and 6009/LB of 1995, decided on 21/11/1995.
(a) Income Tax Ordinance (XXXI of 1979)---
----S.63---Best judgment assessment---Estimate of receipts---Verifiability-- Assessing Officer although admitted to have verified bulk of receipts even then he estimated receipts more than declared by assessee---Tribunal in view of facts of case, reduced receipts estimated by Assessing Officer.
(b) Income-tax---
----Gross profit rate---G.P. rate applied by assessee being reasonable was maintained.
(c) Income Tax Ordinance (XXXI of 1979)---
----S.63---Best judgment assessment---Gross profit rate ---Fluctuation-- Fluctuation in G.P. rate from year to year was, held, to be a natural phenomenon.
I.T.As. Nos.987/LB/1984-85 and 1717/LB/1997-88 ref.
Muhammad Yousaf.T.P. for Appellant
Abdul Rauf, D.R. for Respondent.
Date of hearing: 21st November, 1995
ORDER
AHSAN ALAM (ACCOUNTANT MEMBER).---The appellant is an individual who derived income from motor workshop and also from the sale of spare parts on the basis of commission. The assessee has come in appeal for the charge years 1990-91, 1991-92, 1992-93, 1993-94 and 1994-95. Both the parties are present and have been heard. The appeals are being decided as under:
Assessment Year 1990-91.
2. In view of the fact that the case has always been processed under Self-Assessment Scheme, the Department, therefore, does not take it as the history of the case. As far as the addition and expenses are concerned, there is merit in the grounds of appeal of the assessee. The gross receipts were estimated at Rs.3,85,000 against the declared at Rs.3,52,354. In fact the assessee had declared his gross receipts comprising of income from vehicle repair, commission from sale of machinery and commission from sale of spare parts. Commission was received from various mills and proper documentation, were produced before us. Keeping in view the arguments of the learned A.R. and the record available with us and the documents produced before us the gross receipts are reduced to Rs.3,70,000 against the estimate at Rs.3,85,000 by the Assessing Officer.
3. The Assessing Officer had allowed expenses at Rs.2, 70,000. These expenses are fixed at Rs.2,80,000.
Assessment year 1991-92.
4. The Assessing Officer has himself admitted that receipts to the tune of Rs.2, 56,400 put of Rs.3,11,729 are verifiable. The remaining receipts of Rs.55,329 are in respect of the receipts from workshop. The verifiability of the bulk of receipts had been admitted by the Assessing Officer. We have also seen some of the documents. We have heard the learned D.R. keeping the facts of the case in mind we reduce the estimate of receipts from Rs.3,40,000 to 3,30,000.
5. The learned AAC has discussed the case of the learned Tribunal in his order where 40% G.P. rate has been applied. We have also seen the order of the learned ITAT i.e., I.T.A. No.987/LB/1984-85 and ITA No.1717/LB/1987-88, dated 30-10-1989 (M/s. Pak Automobile Repairing Works, Faisalabad) in which the learned Tribunal reduced G.P. rate to 40%. In the present case the assessee had declared a G.P. rate of 55.46%. The G.P. rate as declared by the assessee is reasonable and it is, therefore, maintained. Nearly all the receipts are verifiable. The Assessing Officer, only to the extent of Rs.55,329, has described the workshop receipts as unverifiable. The A.R., has put up documents which help to establish his point bf view that efforts have successfully been made to make even these receipts verifiable. The Assessing Officer had not appreciated the facts on record. No interference is called for in respect of P&L expenses.
Assessment years 1992-93, 1993-94 and 1994-95.
6.The order of the learned A.C. has been incorporated for the above Charge years in one order. The issues involved are almost similar. For the charge year 1992-93 receipts were estimated by the ITO at Rs.4,00,000 against the declared receipts of Rs.2,79,393. On appeal the learned AAC reduced the estimated receipts to Rs.3,60,000. The learned A.R. of the assessee contended that estimate of receipts by the learned AAC is still excessive and unjustified. Keeping in view the treatment accorded in the immediately preceding year, on the basis of verifiability and also other facts on record the receipts for this year are reduced to Rs.3,20,000. As far as the year 1993-94 is concerned, the learned AAC has reduced the receipts to the level which is even lower than the declared receipts. This fact has not been agitated by the Department, it is strange. However, receipts for the year 1994-95 are fixed at Rs.2,40,000.
7. The G. P. rate for the three years as declared by the assessee is maintained which is proper and reasonable. The learned D.R. has put up his arguments with respect to the G.P. rate which is only 0.46% less than the last year. The fluctuation in G.P. rate from year to year is a natural phenomenon and a solid fact to be appreciated. This matter has already been discussed above.
8. The appeals of the assessee succeed to the extent as above.
C.M.S./266/Trib.
Order accordingly.