I.T.AS. NOS.4462/LB TO 4465/1,13 OF 1991-92 VS I.T.AS. NOS.4462/LB TO 4465/1,13 OF 1991-92
1997 P T D (Trib.) 2183
[Income-tax Appellate Tribunal Pakistan]
Before Sardar Muhammad Anwar A. Khan, Judicial Member and
Sarfraz Ahmad, Accountant Member
I.T.As. Nos.4462/LB to 4465/LB of 1991-92, decided on 23/01/1996.
Income Tax Ordinance (XXXI of 1979)---
----S. 22---Income from business---Estimate of sales---G. P. rate---Assessing Officer, finding assessee's returned sales unsatisfactory, rejected same and made add backs out of P&L Account expenses---Appellate Authority accepted declared sales; found G.P. rate in order and partial relief was allowed---Validity---First Appellate Authority had discussed merits at length and full particulars of parties were available---Additions made by Assessing Officer were, therefore, without reason---Action of First Appellate Authority was confirmed while departmental appeals were dismissed.
Najam-ud-Din Khan, D.R. for Appellant.
Yousaf Akram for Respondent.
Date of hearing: 23rd January, 1996.
ORDER
SARDAR MUHAMMAD ANWAR A. KHAN (JUDICIAL MEMBER). ---These departmental appeals relate to the assessment years 1987-88 to 1990-91. A combined order of the learned CIT (Appeals) Gujranwala, dated 29-10-1991 has been assailed on the issue of sales and reduction in the add-backs out of the P&L account expenses under different heads.
2. The assessee, a private limited company, continued to derive income during jhe years under consideration from supply of machinery parts to different Originations from declared and assessed trading results are as under: ---
| 1987-88 | 1988-89 | 1989-90 | 1990-91 |
Sales declared
| 46339 | 1856277 | 2418126 | 2027435 |
"assessed
| 700000 | 2200000? (Accepted as declared). |
G.P. rate declared
| 14.76 % | 14.69 % | 14.74 % | 14.90 % |
G.P. rate applied
The assessment orders were challenged in appeal. The First Appellate Authority ordered for the acceptance of the declared sales for the assessment years 1987-88 and 1988-89 and applied G.P. rate was found to be in order for all the assessment years. Partial relief was allowed under different heads of the P&L account to the assessee for all the years under appeal
3. .The department has filed appeals on the ground that the relief allowed by the learned First Appellate Authority was unjustified, uncalled for and against the facts of the case. The learned D.R. who arguing the case on behalf of the department submitted that there was no justification for the First Appellate Authority to direct the department to accept the declared sales. The declared version suffers from serious defects, which were not properly explained. The additions made under different heads of P&L account expenses were legal and just as he claimed expenses were not properly vouched and verifiable. On the other hand, the learned A.R. of the assessee supported the impugned order.
4. From the perusal of the impugned order, it is observed that the First Appellate Authority has discussed the merits of the case at length. The lists of the parties to whom the sales were made included the police and private limited companies. Full particulars of the parties were available. The declared sales for the assessment years 1989-90 and 1990-91 had been accepted by the Department. The assessee was not confronted with any discrepancy through a notice under section 62 of the Income Tax Ordinance or otherwise. Due to these reasons, the declared sales were directed to be accepted. The direction of the CIT (Appeals) on this issue does not call for any interference.
5. The department has also challenged the additions outs of-the P&L accounts expenses for the assessment years 1987-88 to 1990-91 which are as under: ---
| Asst. Year | Particulars. | Claimed????????? | Disallowed | Action of CIT (Appeals) |
| 1987-88 | Loading & Forwarding | ? Rs.4,062 | 1,500 | 1,000 |
| Misc.??? Expenses | ? Rs.7,061 | 3,000 | 2,000 |
| Entertainment | ? Rs.1,029??????? | 500 | deleted |
| 1988-89 | Entertainment??? | ? Rs.4,530 | 2,000 | 3,000 |
| | Advertisement | ? Rs.18,250????? | 4,000?? | 1,000 |
| Misc. expenses?? | Rs.3,183 | 1,500 | 1,000 |
| Loading & For warding | Rs.14,625 | 4,000 | 2,000 |
| 1989-90 | Travelling. | Rs.33,770 | 16,000 | 8,000 |
| | Entertainment | Rs.8,207 | 5,000?? | 2,000 |
| Loading & For warding | Rs.21,990 | 8347 | 6,000 |
| 1990-91 | Loading For warding | Rs.19,253 | 10,000 | 5,000 |
| | Advertisement | ? Rs.5,064 | 4,000 | 1,000 |
| Misc. expenses?? | Rs.5,337 | 4,000 | 1,000 |
| Printing & Stationery. | ? Rs.2,540 | 4,000 | Deleted. |
The additions have been made by the I.T.O. for un-vouched and un-detailed and unverifiable reasons. In appeal the learned CIT (Appeals) has reduced/deleted the additions considering the volume of business of the assessee and excessive nature of the expenses. The learned D.R. could not point out any defect in tote impugned order regarding the additions made out I of the P&L account expenses for all the assessment years under consideration. His action is confirmed.
6. As a result of the above discussion all the four departmental appeals are dismissed being devoid of any merit.
C.M.S./317/Trib. ??????? ??????????????????????????????????????????????????????????? Appeals dismissed.