I.T.AS. NOS.10302/LB/DB OF 1991-92 AND 438/LB/DB OF 1992-93 VS I.T.AS. NOS.10302/LB/DB OF 1991-92 AND 438/LB/DB OF 1992-93
1997 P T D (Trib.) 2379
[Income-tax Appellate Tribunal Pakistan]
Before Muhammad Zaman Khan, Judicial Member and Iftikhar Ahmad Bajwa, Accountant Member
I.T.As. Nos. 10302/LB/DB of 1991-92 and 438/LB/DB of 1992-93, decided on 10/10/1996.
Income Tax Ordinance (XXXI of 1979)---
----S. 22---Income from business---Add-backs---G. P. rate---Assessing Officer discarding the declared sales, assessed same at higher figure with high G.P. rate and made some add-backs---First Appellate Authority reduced estimate of sales and G.P. rate but confirmed add-backs---Validity---Held, assessee at the time of hearing, submitted before the Tribunal that he was contended with the decision of First Appellate Authority regarding reduction in sales and upholding the add-backs---First Appellate order in circumstances required no interference but G.P. rate, however, was reduced from 20% to 15% considering history of the assessee.
Tariq Raja for Appellant (in I.T.A. No. 10302/LB/DB of 1991-92).
Mian Qasim Ali, D.R. for Respondent (in I.T.A. No.10302/LB/DB of 1991-92).
Mian Qasim Ali, D.R. for Appellant (in I.T.A. No.438/LB/DB of 1992-93)
Tariq Raja for Respondent (in I.T.A. No.438/LB/DB of 1992-93).
Date of hearing: 7th October, 1996.
ORDER
MUHAMMAD ZAMAN KHAN (JUDICIAL MEMBER).-- Through, this single order, we propose to dispose of the captioned cross appeals, which pertain to the assessment year 1991-92. The assessee in this case is a private limited company, which derived income during the charge year from manufacture and sale of insulated cables and wires.
2. Assessment order was recorded in this case by I.T.O. Companies-19 Lahore on 30-3-1992. The declared results were rejected by the I.T.O. for the reasons assigned in the assessment order and sales were estimated at Rs.55,00,000 as against Rs.48,93,546 declared. Declared G.P. rate at 14 67% was also found low and as such rate was applied at 25%. Some add backs were also made by the Assessing Officer out of P&L account. Feeling aggrieved by the assessment order, the assessee had filed first appeal and the CIT(A) has reduced the estimate of sales to Rs.52,00,000 and G.P. rate to 20% respectively. The add-backs were found reasonable and as such the same have been confirmed by the First Appellate Authority
3. Still dissatisfied, the assessee has come up in second appeal alleging that the relief allowed by the CIT(A) regarding sales and G.P. rate was inadequate and that the add-backs have been wrongly confirmed by the first Appellate Authority. However, at the time of hearing learned A.R. of the assessee submitted that the assessee was contented with the decision of the first Appellate Authority regarding the reduction in sales and upholding the add-backs. In these circumstances these points though agitated in the grounds of appeal, as having not been pressed before us, stand decided accordingly meaning thereby that the order of the CIT(A) in this respect remains undisturbed
4. On the contrary, the department has filed the cross-appeal stating that CIT(A) was not justified in reducing sales and G.P. rate.
5. We have heard the learned authorised representatives of both the parties and have also gone through the orders, which have been delivered in this case at the two forums below.
6. It is manifest from the orders passed by the departmental officers that in the immediately preceding assessment year i.e., 1990-91, sales were declared by the assessee at Rs.29,06,834 but the same were estimated by the Assessing Officer at Rs.34,00,000 and confirmed by the CIT(A) accordingly. Later, although both the parties had filed appeals in the Tribunal but the order confirming the sales at Rs.34,00,000 was not agitated over there. In the year under review, the assessee has itself shown substantial improvement in the declared turnover as compared to the preceding year and it was this circumstance which influenced the mind of the CIT(A) in showing indulgence to the assessee and rightly so, by reducing the estimate of sales at Rs.55,00,000 to Rs.52,00,000 as against the declared sales of Rs.48,93,546. Learned D.R. has not been able to bring home the allegation that the decrease made in sales by the CIT(A) was unjustified. We are, therefore, irresistibly driven to conclude that the decision of CIT(A) on this issue is unexceptionable, the same being fair and reasonable. The fixation of sales at Rs.52,00,000 is accordingly maintained and the objection raised by the Department is overruled.
7. As indicated above, both the parties are not satisfied with the rate of 20% as adopted by the CIT(A). According to the assessee, the same was excessive whereas the contention of the department is that applied G.P. rate of 25 % was appropriate.
8. Learned A.R. of the assessee has placed before us, 'at the outset, a copy of the order dated 19-3-1994 passed by ITAT, Lahore Bench, Lahore; while deciding the cross-appeals of the parties pertaining to the assessment year 1990-91. In that year also the applied G.P. rate of 25% was reduced to 20% by the first Appellate Authority, as in the year under review, but the same has been reduced to 15 % by the Tribunal vide the order dated 19-3-1994 ibid, which order has since attained finality. Besides this learned A.R. of the assessee has also placed on the record copies of the assessment orders made in respect of the assessee pertaining to the Assessment Years 1992-93 1993-94, 1994-95 and 1995-96, according to which the Department itself has applied G.P. rate of 15% in all these years. With these circumstances in the background, learned A.R. of the assessee has submitted that the applied G.P. rate of 20% in the year under review was excessive. The contention is not devoid of force and as such the same must prevail. However, before concluding we may also point out here that when confronted with the above state of affairs, learned D.R. had nothing to say in support of the ground taken by the Department in the grounds of appeal that the applied 1G.P. rate of 25% be restored. Be that as it may, in view of the decision of the Tribunal dated 19-3-1993 ibid and the rate fixed in the subsequent years as explained above, we hereby reduce the adopted G.P. rate of 20% as directed by the CIT(A) to 15% for the assessment year 1991-92, as well which would be in line with the past history of the assessee and also in consonance with the parallel cases as relied upon in the subsequent years.
9. As a sequel to the above, the departmental appeal is dismissed whereas the appeal filed by the assessee succeeds to the extent and in the manner as stipulated above.
C.M.S./392/Trib. Appeal allowed.