Income Tax Ordinance (XXXI of 1979)---

---Ss. 22 & 32(3)---Income from business---Additions both in Trading and Profit and Loss Account---Declared results by assessee were rejected by Assessing Officer---Entire additions were based on past history of the case-- Validity---Held, declared results for the year under appeal, being better than the preceding year and no defect having been detected and last year's trading account having been accepted additions in the trading accounts of the two years were without justification and, therefore, liable to be deleted.

Suhail Babri, I.T.P. for Appellant (in I.T.As. No.2213/LB and 2214/LB of 199.1-92).

Mrs. Sameera Yaseen, D.R. for Respondent (in I.T.As. No.2213/LB and 2214/LB of 1991-92).

Mrs. Sameera Yaseen, D.R. for Appellant (in I.T.As. Nos.6109/LB and 3008/LB of 1991-92).

Suhail Babri, I.T.P. for Respondent (in I.T.As. Nos.6109/LB and 3008/LB of 1991-92).

Date of hearing: 4th October, 1995.

ORDER

IFTIKHAR AHMAD BAJAWA (ACCOUNTANT MEMBER).---In this case of a spare part dealer CIT (Appeal's) orders relating to assessment years 1989-90 and 1990-91 are subject-matter of cross-appeals by the assessee as well as by the Department.

2.The declared results for the years under appeal as compared with the immediately preceding year were as under.

ASSESSMENT YEARS

3. In both the assessments trading accounts were rejected with routine observations mainly on the basis of past history and additions of Rs.35,000 and Rs.60,000 respectively were made in two assessments. While rejecting the account for the year 1989-90 it was observed.

"However, the facts of the case are identical as stated in the 1st assessment year i.e., 1988-89. Considering the facts of the case & keeping in view the past history of the case round addition of Rs.35,000 is made in the trading account.

In next year's assessment sales and trading expenses were stated as not fully verifiable though no such instances were specified. Thus, the additions of Rs.35,000 and Rs.60,000 were entirely based on the past history.

4. The addition in assessment year 1989-90 was upheld and addition is the assessment year 1990-91 was reduced to Rs.15,000 by the CIT(Appeals). Some marginal relief in P&L add-backs were 11so allowed in assessment year 1989-90. The department is contesting the treatment of P&L account in assessment year 1989-90 and reducing trading account addition for the assessment year 1990-91 while assessee is contesting the treatment of trading as well as P&L Account for the two years.

5. In the immediately preceding year an addition of Rs.25,000 had been made in the trading account which failed the test of appeal and was deleted by the Appellate Authority. Considering that results for the two years were much better that the preceding year and no defects whatsoever had been detected and also the fact that last year's trading results stood accepted after the first appeal, additions in trading account for the two years were without any justification and are hereby deleted.

6. So far as P&L add-backs are concerned, disallowances under the heads "machinery reprise" and "pick up account in assessment year 1989-90 were found to be misconceived and deleted by the CIT (Appeals) while disallowances in assessment year 1990-91 were upheld in appeal. Both the parties were unable to make out a case for interference. The orders of the First Appellate Authority on this point need no interference.

7. The four appeals are disposed of as above.

C.M.S./400/Trib.Appeals disposed of.