I.T.A. NO-1035/LB OF 1992-93 VS I.T.A. NO-1035/LB OF 1992-93
1997 P T D (Trib.) 2299
[Income-tax Appellate Tribunal Pakistan]
Before Sarfraz Ahmad, Accountant Member
I.T.A. No. 1035/LB of 1992-93, decided on 13/01/1997.
Income Tax Ordinance (XXXI of 1979)---
----S. 22---Income from business---Brick kiln ---Assessee returned income-- Assessing Officer, discarding declared results and basing his order on Inspector's report, took capacity of kiln at 8,00,000 bricks and number of rounds at 3 against 2 and fixed rates of different types of bricks on his own and applied 25% G.P. rate---First Appellate Forum upheld the assessment-- Held, keeping in view that there had been labour problem and litigation between brick kiln owners and labour, it would be in, fitness of things to adopt number of rounds at 2-1/2 for period under appeal---Capacity of kiln was directed to be adopted as declared by assessee as there had been no change during year under appeal---Rates of bricks adopted as being fair and reasonable called for no interference.
I.T.A. No.455/LB of 1991-92 ref.
M. Tahir for Appellant
Mian Masood Ahmad, D.R. for Respondent;
Date of hearing: 13th January, 1997
ORDER
This appeal by the assessee for the assessment year 1989-90 calls in question the order passed by the A.A.C., Range VI, Lahore dated 5-12-1991.
The brief facts of the case are that the appellant, a registered firm, derives income from running a brick kiln at Mohalanwal, Multan Road, Lahore, Return was filed to declare income at Rs. 88,560. The case was processed under normal law as the last assessed income was more than the income declared. The declared results were discarded and on the basis of the Inspector's inquiry report, the capacity of the brick kiln was taken at 8,00,000 bricks against declared at 6,50,000. The number of rounds were adopted at 3 against declared at 2 by taking the price of special brand bricks at Rs. 900 per thousand and 1st class bricks at Rs.700 per thousand, IIndclass bricks at Rs.600 per thousand and III rd class bricks at Rs.400 per thousand. The total sales by adopting the usual formula as in the case of brick kiln was determined at Rs. 14,99,500. These were subjected to a G.P. rate of 25 % and after curtailing the profit and loss account expenses claimed, net income was determined at Rs.283,715. Aggrieved with the treatment meted out the appellant went in appeal. The A.A.C. Range-VI Lahore vide the impugned order upheld the assessment. It is against these orders that the appellant has come before the Tribunal.
3. It is contended by the A.R. that during the period under appeal the brick kiln was closed for a period of four months because of disputes and only after the interference by the Superior Courts, the kilns started operation when the disputes with the labour were settled. In support of this contention photocopies of the newspaper cuttings too have been produced. It is further contended that the Assessing Officer on wrong premises has proceeded to adopt the capacity of the kiln at 800,000 while in fact the capacity of the kiln was of 650,000 bricks which fact had also been accepted by the department in the immediately preceding assessment year 1989-90. Therefore, there was no justification to deviate during the year under appeal. It is also contended that due to the short period available because of the closure of the brick kilns in general, the appellant's brick kiln also operated for a part of the year and only two rounds were operated. It is further contended that even in other similar cases this fact has been acknowledged and lesser number of rounds had been directed to be adopted even at the appeal stage. Reference in this respect is made to I.T.A. No. 455/LB of 1991-92 (Assessment Year 1989-90). It is also contended by the A.R. that the Assessing Officer was not justified to adopt the sale rate of various classes of bricks at such a high figure without any solid basis merely on presumptions, which was not fair.
4. The learned D.R. on the other hand, maintains the assessment made to be fair and the capacity of the kiln adopted as well as the number of rounds taken to be proper. The rate in respect of different classes of bricks too are contended to be reasonable.
5. After hearing both the parties and keeping in view that there has been labour problem resulting in country-wide litigation between the brick kiln owners and the labour supported by certain human right organisations. There was some effect on the operation of the brick kilns. It would,' therefore, be in the fitness of things to adopt the number of rounds at 2-1/2 for the period under appeal. So far as the capacity of the kiln is concerned, keeping in view the treatment meted out by the Department in the immediately preceding year and also the fact that there has been no change in the capacity during the year under appeal, the same is directed to be adopted at 650,000. However, the rates adopted in respect of various class of bricks being fair and reasonable do not call for any interference. The appeal partly succeeds to the extent and in the manner as indicated above.
C.M.S./339/Trib. Appeal partly allowed.