LT.AS. NOS. 2045/LB, 2475/1,13 AND 2454/LB OF 1987-88 VS LT.AS. NOS. 2045/LB, 2475/1,13 AND 2454/LB OF 1987-88
1997 P T D (Trib.) 783
[Income-tax Appellate Tribunal Pakistan]
Before Ashfaq Ahmad, Accountant Member and Muhammad Zaman Khan, Judicial Member
I.T.As. Nos. 2045/0$, 2475/LB and 2454/LB of 1987-88, decided on 14/12/1994.
Income tax Ordinance (XXXI of 1979)---
----Ss.22 & 23---Addition- =Appeal to Commissioner---Assessing Officer had passed a comprehensive and detailed order and had made addition after discussing each and every head of account---Commissioner of Income-tax (Appeals) had failed to provide sufficient reasons to allow the relief to the assessee---Order of Commissioner of Income tax (Appeals) was vacated by the Tribunal and that of Income Tax Officer restored in circumstances.
M.S. Bajwa, I.T.P. and Shahid Nasim, D.R. for Appellant (in I.T.A. No. 2045/LB of 1987-88).
M.S. Bajwa, I.T.P. for Respondent (in I.T.As. Nos. 2475/LB and 2454/LB of 1987-88).
Date of hearing: 14th December, 1994.
ORDER
ASHFAQ AHMAD (ACCOUNTANT MEMBER). ---These are three appeals relating to the assessment year 1986-87. The Department and the assessee are in cross appeal against the order passed by the CIT(A), Zone-III, Lahore, dated 5-12-1987, whereas the third appeal is at the instance of the Department against the order of the A.A.C. of .Income-tax, Sialkot Range, Sialkot, dated 27-1-1988.
2. The brief facts of the case are that the assessee is a registered firm deriving income from rice business and other food grain items. For the year under consideration the assessee had filed return to declare income of Rs.53,380. Sales have been declared at Rs.38,23,727 The I.T.O rejected the declared version of the assessee on the ground that the books have been written in a few sittings, the yield in most of the cases is low, the manufacturing expenses claimed were high, the purchase rate for basmati and Irri-6 were also high as compared to the Government rates. Stock register was also held not to have been maintained. The purchases were found to be unvouched. It was further held by the assessing officer that the assessee was charging excess price against the supply of substandard quality of rice. On the basis of above defects the declared version was rejected and for the reasons recorded under various heads of account the assessing officer adopted the sale rate of Rs.230 per 100 Kg. in respect of-paddy Basmati and Rs.119 per 100 Kg. in Irri-6 account. In yield account, additions under the head Irri 6 and Ks 262 were made at Rs.5,344 and 5,922 respectively. The manufacturing expenses were claimed by the assessee at Rs.12.19 per 10() Kg. which were allowed by the assessing officer at Rs. 11 per 100 K.G. and addition of Rs.19.464 was worked out under this account. Under the head private account an addition of Rs.6,338 was made. Under the head private sale account an addition of Rs.40,954 was made. Under the head Tota Basmati account an addition of Rs.17.271. was made. Certain addition in the profit and loss account were also made by the assessing officer.
3. The assessee feeling aggrieved with the order of the assessing office: went in appeal before the CIT (A) who vide his impugned order allowed the sale rate at Rs.233 under the head paddy Basmati. The rate adopted by the I.T.O. in Irri account was maintained by the CIT (A). In yield account in paddy Irri-6 addition was reduced to Rs.2500. In Ks 282 the addition was also reduced to Rs.2,500. Manufacturing expenses were allowed by the C.I.T.(A) at Rs.11.25 per 100 Kg. In sale account of Phak the addition was confirmed. In powder account the CIT(A) directed the I.T.O. to accept the declared version of the assessee as no irregularity was held to be pointed out by the I.T.O. In Private sale account the addition was restricted to 50%. In Tota Basmati tile addition was again restricted at 50%. Addition in Arhat account was maintained. The add backs in most of the profit arid loss account expenses were found to be unvouched and unverifiable by the CIT (A) and the same were ordered to be maintained. However, the car expenses were reduced to 25 % of the claim. Against this treatment of the assessing officer, both the parties have come in appeal before the Tribunal.
4. We have heard both the learned authorized representatives of the parties and have also gone through the orders passed by the officer below in this case. The learned D.R. has vehemently urged that the assessing officer has passed a comprehensive and detailed order and he has provided sufficient reasons under each and every head of account to make addition. On the other hand, the learned D.R. pointed out, that the learned CIT (A) has provided no reasons for allowing relief to the assessee and he has passed a sketchy order. The learned A.R. appearing on behalf of the assessee also objected to order of the C.I.T.(A) and the relief allowed by the first appellate authority was contested to be still inadequate. We agree with the contention made by the learned D.R. than the assessing officer in this case has passed a comprehensive and detailed order and has made addition after discussing each end every head of account. On the other hand the C.I.T.(A) had failed to provide sufficient reasons to allow the relief to the assessee. In this view of the matter, we vacate the order of the C.I.T.(A) and restore that of the assessing officer.
5. Coming to the penalty appeal filed by the department penalty @ 5 % at Rs.1,181 was levied on the assessment for default in payment of tax amounting to Rs.23,620. The assessee feeling aggrieved against the order of the I.T.O. went in appeal before the A.A.C. who vide his impugned order held that assessee had filed appeal against order passed by the I.T.O. under section 62 before the C.I.T.(A), Zone-III, 'Lahore wherein the demand had been partly reduced, it was held by the A.A. C. that since the original demand has been modified the penalty imposed cannot be sustained at law. The A.A.C. while relying on the ration of the case of Begum Mumtaz Jamal deleted the penalty. However, as indicated above, we have vacated the impugned order of the C.I.T.(A) whereby the relief had been granted to the assessee and has restored the order passed by the I.T.O. under section 62. The penalty deleted by the A.A.C. also stands restored.
6. As a result of the above discussion, the appeal filed at the instance of the assessee stands dismissed whereas the appeals filed by the Department succeed in the manner and to the extent as indicated above.
M.B.A./179/T Order accordingly.