(a) Income Tax Ordinance (XXXI of 1979)‑‑‑

‑‑‑‑Ss.80C/156, 50(5) & 50(4)‑‑‑S.R.O. 593(1)/91, dated 30‑6‑1991, Cl. (iv)‑‑‑Tax on income of certain contractors and importers‑‑ Exemption‑‑‑Tax was not deducted by the Customs Authorities on‑import of machinery by an exempt unit;‑‑On maturity of letter of credit, for payment, financial arrangement was made with the Leasing Company for sale and lease back of such plant and machinery‑Assessee was assessed under Ss. 156/80C of the Income Tax Ordinance, 1979 and demanded tax @ 2% under S.50(5) of the Income Tax Ordinance, 1979 on the ground that the assessee had sold those assets to leasing company thus, transaction fell under the category of commercial import liable to tax under S.50(5) read with S.80C of the Income Tax Ordinance, 1979‑‑ Validity‑‑‑Under S.50(4)(a), Income Tax Ordinance, 1979 the deduction was to be made on supply of goods for `services rendered to or the execution of a contract‑‑Transaction in question was not covered by any of the said categories‑‑‑Machinery had been imported by the assessee for its own use and lease back through such financial arrangement was not a commercial transaction ‑‑‑Assessee's business was neither import nor sale of such machinery nor any such impression could be gathered from such transaction 'which was not even permitted by the objective clause o1' the Company‑‑‑Business of the Company was manufacturing of polyester filament yarn and said object was being carried out till this day with the same machinery, which was presumed to have been sold‑‑‑No reason existed to hold that it was chargeable either under S.50(5) or S.50(4) of the Income Tax Ordinance, 1979 and consequently assessable under S.80(c) of the Income Tax Ordinance, 1979‑‑‑Assessment under Ss.80(c)/156 of the Income Tax Ordinance, 1979 was cancelled and original order was restored by the Tribunal in circumstance.

(b) Income Tax Ordinance (XXXI of 1979)‑‑‑

‑‑‑‑Ss.52, 50(4), (5) & 62‑‑‑Liability of person failing to deduct or pay tax ‑‑‑Assessee in default‑‑‑Non‑deduction of tax at import stage ‑‑‑Effect ‑‑Assessee was treated in default on import by applying the provision of S.50(4) of the Income Tax Ordinance, 1979‑‑‑Validity‑‑‑Assessee categorically stated that figure represented import on which the provisions of S.50(4) did not apply as the same had to be supply of goods and not import by the assessee‑‑‑Fact that the documents were furnished to the Assessing Officer and raising of such issue before the First Appellate Authority was a‑ matter of record which had been mentioned by the First Appellate Authority in its order lout had not specifically given a direct finding‑‑‑Issue had not been dilated upon ill the required manner and the order was not a speaking one ‑‑‑Assessee had not only mentioned the L.C. number but had also given the weight and the amount, which could easily be verified from the record‑‑‑Tribunal had already taken a serious notice that S.52 was being used as substitute for regular charging provisions‑‑‑Issue was a serious example of such practice‑‑‑If no tax in the case of import, had been deducted it was not the assessee who was defaulter‑‑‑Notwithstanding the fact that assessee was an exempt unit, if any tax was deductible it was under S.50(5) of the Income Tax Ordinance, 1979‑‑‑Default in deduction of the same would have made the withholding agent as defaulter and not assessee‑‑‑By holding assessee in default on import by applying the provision of S.50(4) should not have been supported by the First Appellate Authority‑‑‑Appellate Tribunal did not agree with the Department on the plea that assessee failed to satisfy the Assessing Officer that this was not direct purchase and only an import‑‑‑Mentioning in unequivocal terms of the L.C. Number and corresponding purchase entry in the books was enough proof which could be verified at all stages of assessment either under S.62 or under S.52 of the Income Tax Ordinance, 1979 as the case may be‑‑‑Addition made under S.52. by holding assessee in default was without any justification and the same was deleted by the Tribunal in circumstances.

(c) Income Tax Ordinance (XXXI of 1979)‑‑‑

‑‑‑‑Ss.52 & 50(4)‑‑‑Liability of person failing to deduct or pay tax‑‑ Assessee in default‑‑‑Exemption period‑‑‑Non‑deduction of tax‑‑ Exemption certificate‑‑‑Proof of non‑acceptance of tax had not been furnished regarding payment made after availing the exemption certificate‑‑‑Validity‑‑‑Facts showed that payments were made after 30^th of June, the poof of which was furnished before the Assessing Officer‑‑ Without going into the issue that .whether exemption certificate was applicable on the transaction or not, holding the same as chargeable to deduction was not justified at all‑‑‑Law did not provide for hypothetical estimate for charging an assessee in default‑‑‑Provision of law was a sort of penal action which should not be taken unless definite evidence with regard to purchase/supply was available‑‑‑Principle that doubt was to be resolved in favour of the assessee may also be kept in mind though in the present case such situation did not arise‑‑‑Amount had been paid after 30th of June, the charging of tax on the same, by no means could be considered as justified and the .same was deleted by the Tribunal.

(d) Income Tax Ordinance (XXXI of 1979)‑‑‑

‑‑‑‑Ss.52 & 50‑‑‑Liability of person failing to deduct or pay tax‑‑ Assessee in default‑‑‑Payment of commission‑‑‑Non‑proof of payment of commission and non‑deduction of tax‑‑‑Commission agent deducted his commission froth the main payment ‑‑‑Assessee produced NTN of commission agent and assessment order before First Appellate Authority which was not accepted‑‑‑Validity‑‑‑By producing NTN the assessee had fulfilled the requirement‑‑‑First Appellate Authority should not‑have refused to entertain the copies of the order‑‑‑If the figure was obtaining thereon and the tax had been paid on the basis of the receipts by the said recipient holding the assessee in default was not justified‑‑‑Order was set aside by the Tribunal on the point for verification as to whether such amount of commission had been charged to tax in their account or not‑‑ Assessing Officer on confirmation was to accept assessee's contention and if the evidence did not satisfy the requirement of law, the Department should be at liberty to charge tax on the basis of the same:

(e) Income Tax Ordinance (XXXI of 1979)‑‑‑

‑‑‑‑Ss.52 & 50(4)‑‑‑Liability of person failing to deduct or pay. tax‑‑ Assessee in default‑ Payment to building contractor‑‑‑Non‑deduction of tax as each amount was less than threshold i.e. Rs.25,000‑‑‑Validity‑; ‑List could not be checked and verified by the Tribunal and the

determination as to whether the amounts were less than thresh hold and were counter‑purchases, was only possible at the assessment stage‑‑ Tribunal could not go into the details and check the veracity of each one of them‑‑‑Even otherwise the assessee also had not furnished any such copy to the Tribunal so as to involve in such a working‑‑‑Issue was set aside by the Tribunal with the direction that the finding in a Tribunal's order in Chenab Fabrics Limited, Faisalabad vide I.T.A. No.749/LB of 1997, dated 27‑5‑1998, be applied in its letter and spirit in which the sale and supply had been distinguished.

I.T.A. No.749/LB of 1997 rel.

Mirza Anwar Baig for Appellant.

Javed Aziz, D.R. for Respondent

Date of hearing: 6th June, 2001.

ORDER

KHAWAJA FAROOQ SAEED (JUDICIAL MEMBER) The petitioner in all the years is assessee. Appeals are on different issues. The same are, therefore, decided separately.

Assessment year 1994‑95

For the assessment year 1994‑95 the assessee is against treating the assessee chargeable under section 80(c) on sale and lease back of its assets.

Brief facts of the case are that Kohinoor Fibers Limited was incorporated on 11‑12‑1991 ‑as a non‑listed Public Ltd. Company for setting up a new plant for manufacturing of polyester filament yarn. For this purpose plant and machinery was imported from abroad. For importing these plant and machinery the letters of credit from M.C.B. were opened in the name of Kohinoor Fibers Limited. The said plant and machinery were cleared by the 'Custom Authorities without deduction of tax at source under section 50(5) for the same was imported by an exempt unlit. At the time of maturity of letter of credit, the bank i.e. M.C.B. asked for payment against import of machinery. The appellant being in short of funds made a request to the leasing Company for finance which was acceded, to. The plant and machinery were later installed in Kohinoor Fibre. Mills Limited.

The assessment for this year was finalized on 30‑6‑1997 under section 62 at net loss of Rs.76,905,041 and in the said assessment order no income under section 80C read with section 50(5) .was made by the Assessing Officer, Later a notice under section 156 for the assessment year 1994‑95 was issued on 20‑11‑1997 by observing that machinery worth Rs.151,607,700 was imported during this period and tax @ 2% under section 50(5) was not deducted. The Company sold these assets to leasing Company thus the transaction falls under the category of commercial import liable to tax under section 50(5) read with section 80(c). In response to this notice the assessee's A.R. replied as under: ‑‑‑

(i) In the instant case the import of plant and machinery is exempt from tax under section 50(5) vide clause (iv) of S.R.O. 593(1)/91, dated June 30, 1991 and as such no tax was deductible on import stage.

(ii) That the sale and lease back of plant and machinery is only a financial arrangement which in actual terms does not involve a sale as such the assessee cannot be treated as commercial importer.

(iii) Proposed rectification under the umbrella of section 156 in fact is not mistake apparent from the record.

The Assessing Officer turned down the reply' with the following reasons:‑‑‑

(1) That assessee was required to obtain exemption certificate under section 50(5) for claiming an exemption but no such exemption certificate was obtained.

(2) The machinery was sold to the leasing companies as such the assessee falls in the category of commercial importer and tax should have been deducted under section 50(5).

(3) As the assessee did not furnish exemption certificate. This mistake is apparent from record and tax at the stage of importer @ 2% of import value was be charged.

On the basis of above the appellant was assessed to tax under sections 156/80C and tax demand of Rs.3,032,175. Not being satisfied with this treatment the appellant has come up before us on the following grounds:‑‑

(a) That the Assessing .Officer was not justified to invoke the provision of section 156 in this case as there is no mistake apparent from the record.

(b) The Assessing Officer was not justified to treat the import of plant and machinery as a commercial import liable to presumptive tax under section 80C.

The CIT(A) dismissed the appeal and order under section 156 was confirmed. Not being satisfied with this treatment the appellant has come up before us on the following grounds:‑‑‑

(1) That the CIT (Appeals) was not justified to confirm the action of the Assessing Officer under section 156 as in this case there is no mistake apparent from the record. This provision is not applicable in those cases where there are two views possible or there is a debatable point.

(2) That the CIT Appeals has erred in upholding that the plant and machinery imported is a commercial import liable to presumptive tax under section 80C. that in this assessment year 1994‑95 no machinery was imported by the assessee at all, therefore, no question of deducting tax at source under section 50(5) arises.

Secondly the tax was not deducted by the Custom Authorities on the ground that income‑tax was not chargeable on new unit licence. It is also submitted the import licence which was granted to the appellant was of an industrial consumer and not as a commercial importer and the assessee never did business as a commercial importer since its incorporation. Hence the provision of section 80‑C is not applicable.

(3) That the sale and lease back of plant and machinery under finance lease is only a financing arrangement which in actual terms does not fall within the ambit of words "supply of goods" as mentioned in section 50(4) hence the provision of section 80C is not applicable in this case. In support of his submissions the assessee has submitted three unreported judgments of Income‑tax Appellate Tribunal:

The judgments referred by the learned A.R. in unequivocal terms hold that the sale and lease back arrangement by no means is a supply. It has been held to be a financial arrangement, which practically is not covered within the definition of sale/supply. The financial leasing industry the world over today considers the acquisition of goods by the lesser and retention of title by him as the owner is only a measure to secure his interest as a financier. The ownership is only a camouflage and there is no real intention on the part of the leasing company to retain it or deal in. the same as goods. The financial leasing transactions in reality are loan transactions, which were held to be not even chargeable to sales tax in some cases. This issue came for decision before the Supreme Court of India in the case of Sundaram Finance Ltd. v. State of Kerala and another 17 STC 489 (SC). In a majority ruling held against the levy of sales tax on a higher purchase transaction on the ground that the agreement in substance was not of higher purchase, it was held that the accounting bodies all over the world recognize this true essence of a finance leasing as lending on security. The Court further remarked that a prudent law must make distinction between the sale‑type lease, a financial lease and a hiring transaction.

The judgment referred by the learned A.R. in terms of Messrs Chenab Fabrics by this Tribunal has already held a similar transaction to be a financial arrangement and the sale and lease to be only an arrangements of security of the interest of lesser leasing company. The Tribunal further while defining the word `sale' and `supply' have held that transaction to be not even a sale what to call as supply. Said observation is now being supported by the aforementioned judgment of the Supreme Court of India, which has considered such a transaction to be exemption from sales tax. In Banking Law for the purposes of security against loan the properties pledged practically does not remain alienable even by the original owner. The encumbrance upon such pledged property deprives the owner the right to sell it unless the Bank redeems the same after satisfaction of the loans. In lease finance this purchase and lease back is synonymous in letter as well as in spirit to the loan advance transaction by a bank. It would, therefore, be highly improper to subject a financial transaction of such type to tax by charging it under the provisions of section 50(4)(a). The nomenclature given in such circumstances should be ignored and the Courts should look behind the agreement to examine the real nature of the transaction. There are sufficient precedents in support of lifting of veil in such circumstances of which the most important is the SITE case reported as PLD 1986 SC 97. Even if the lesser is regarded as the owner and the arrangement of sale and lease back is regarded as supply, then, the aggregate of the lease rentals comprise of several components apart from the recovery of the cost of the asset, major among which is interest, other component being the premium for absorbing the risk of obsolescence, etc. Thus, treating the aggregate lease rental as the price of turnover, as in this case the department have sought to do, would amount to levying tax on loan amount. In case of contracts, the State legislation has provided for deduction of certain percentage from the sales price towards the supply element but no such provision has been made for leases. This is a settled principle of interpretation that intendments of legislation cannot be ignored and Courts are not permitted to go beyond what is mentioned in provision of law. In section 50(4)(a), the deduction is to be made on supply of goods for `services rendered to' or, the execution of a contract'. This transaction is not covered in any of them. The machinery has been imported by the assessee for its own use and sale and lease back through such financial arrangement is not a commercial transaction. Assessee business was neither import for sale of such machinery nor any such impression comes from above transaction. Further, as per A.R.'s statement this is not even permitted by the objective clause of the company. The business of the company is manufacturing of polyester filament yarn and said object is being carried out till this day with the same machinery, which is presumed to have been sold. There is, therefore, no reason to hold that it was chargeable either under section 50(5) or 50(4) and consequently assessable under section 80(c). The assessment under sections 80(c)/156, therefore, is cancelled and original order is hereby restored.

Assessment years 1995‑96 and 1996‑97 order under sections 52/86.

The brief facts of the above‑noted assessment years on each issue respectively are as under:‑‑

Raw Materials 1995‑96:

That raw material polyester chips 160000 Kgs. was imported vide L/C No.93/197 for Rs.10,815,568 the Assessing Officer issued notice under section 52 requiring the appellant to give proof of deduction of tax at source under section :)v<<+). in rcpiy !V 1uia im111.G 1116 appellant submitted that raw material of Rs.10,815,568 was imported from abroad to which provision of section 50(4) are not attracted and in this respect total documents for proof of import had been submitted to the Assessing Officer. This letter had been ignored by the Assessing Officer and subjected to the said amount to tax under section 50(4) and CIT Appeals also confirmed the Assessing Officer's order on this point. It, however, is quite surprising that no heed has been given either by the Assessing Officer or by the First Appellate Authority to the contentions of the assessee A.R. The assessee categorically stated that this figure represents import on which the provisions of section 50(4) does not apply as the same has to be supply of goods and not import by the assessee

Under no stretch of imagination it can be held to be a supply. The fact that the documents were furnished to the ITO and this issue was raised before the CIT is a matter of record. The honourable CIT has mentioned the same but has not specifically given a direct finding. This issue has not been dilated in the required manner and the order is not a speaking order. The assessee has not only mentioned the L.C. No. but have also given the weight and the amount, which easily can be verified from the record. This Tribunal has already taken a serious notice that section 52 is being used as substitute of regular charging provisions. This issue is an acute example of the same. In the case of import of no tax has been, deducted it is not the assessee who is defaulter. Notwithstanding the fact that assessee is an exempt unit if any tax was deductible it was under section 50(5). Defaulter in deduction in the same would have made the withholding agent as defaulter and not assessee. By holding assessee as in default on import by applying the provision of section 50(4) should not have been supported by the First Appellate Authority. On this, therefore, we again cannot agree with the learned D.R. who said that the assessee failed to satisfy the Assessing Officer that this was not direct purchase and only an import. The mentioning in unequivocal terms of the L.C. No. and corresponding purchase entry in the books is enough proof which could be verified at all stages of assessment either under section 62 or under section 52 as the case may be. The addition made under section 52 by holding assessee‑in‑default for this amount, therefore, is without any justification and the same is hereby deleted.

Raw Materials 1996‑97

Total purchases from Dhan Fibre Limited were of Rs.3,999,320 out of which 2,560,000 was paid on or before 26‑6‑1996 on which tax was deducted and deposited. The other payments were made through Plantinum Commercial Bank vide Cheques Nos.054120, 054125, 054133, 0154143, 05414, 057130 and 057309 of which the A.R. says complete documents have been provided. This was the exemption period of which certificate under section 50(4) was produced to the appellant by

PTD

ine unan Hbre Limited and copy of this certificate was given to the Assessing Officer. This submission was not accepted by the Assessing Authority who subjected the balance payment of Rs.1,439,320 to tax under section 50(4) with the following remarks:‑‑

"Security of exemption certificate of Dhan Fibre Limited has been made which revealed that before 27‑6‑1996 payment of Rs.2,560,000 was made and after 27‑6‑1996 payment of Rs.1,439.320 was made, this shows that in about whole of the year payment of Rs.2,560,000 was made and on the other side within four days payment of Rs.1,439,320 was made. No proof has been furnished regarding payment made after availing the exemption certificate, hence on the amount of 1,439,320 paid and tax was not deducted. "

The said treatment was contested appeal before the CIT Appeals with the following submissions:

Firstly the Assessing Officer's assumption that the entire purchases of Rs.3,999,320 from Dhan Fibre Limited has been made throughout the year is not correct. In fact these purchases were made on 23‑6‑1996 and 25‑6‑1996 only as per copy of invoices enclosed. Thus it was not paid Rs.2.560,000 on or before 26‑6‑1996 and balance on or after 27‑6‑1996 secondly the evidence of payment on or after 27‑6‑1996 was never asked for by the Assessing Officer otherwise the same could have been provided for verification. Actually the balance payment of Rs.1,439,320 payable on 30‑6‑1996 was paid on November, 1996 through Platinum Commercial Bank vide, cheques as mentioned above which period falls during the exemption period copy of which exemption certificate under section 50(4) was given to the lower income‑tax authorities. This payment of Rs.1,439,320 actually falls in the assessment year 1997‑98.

The said submission was not accepted by the CIT Appeals who confirmed the order of the Assessing Officer under section 52.

So far as purchases from Dhan Fibre Limited is concerned from above detailed facts it is obvious that the payment for the impugned amount was made after 30th of June, '1996, the details of the cheques as mentioned above with copy of the exemption certificate from Dhan Fibre Limited was produced. From the description above, this fact is evident that these payments were made after 30th of June, the proof of which was furnished before the Assessing Officer. Without going into the issue that whether exemption certificate was applicable on this transaction or not holding the same as chargeable to deduction for the impugned years, is not justified at all. The deduction on a supply purchase is at the time of making the payment. Entire payment of these transactions is through

cheques and the same are in November, 1996 as stated by the learned A.R. The question of charging the same is the year 1996‑97 does not arise.

The learned D.R. was confronted above facts on which he replied that the assessee had not produced these documents at the assessment stage; hence these should not be entertained at this stage of the proceedings to which we cannot subscribe. The assessee claims that he had made only a part payment of the total purchase of Rs.39,99,320 from Dhan Fibre Limited. This payment amounted to Rs.25,60,000 and was up to 26‑6‑1996 is a matter of record. No payment has been shown between 26/30‑6‑1996, which means balance, was paid after 30‑6‑1997. The law does not provide for hypothetical estimate for charging an assessee in default. This provision of law is a sort of penal action, which should not be. taken unless definite evidence with regard to purchase/ supply is available. In this regard cordial principle that the doubt is to be p resolved in favour of the assessee may also be‑ kept in mind though in the present case this situation does not arise. The amount has been paid after or on 30th of June, the charging of tax on the same, therefore; by no means can be considered as justified. The same is hereby deleted.

Further, in this year the assessee purchased only one consignment of 245000 Kgs. of filament A grade from Pakistan Synthetic Limited on 15‑5‑1996 of which copy . of invoice dated 15‑5‑1996 had been provided to lower income‑tax authorities and tax under section 50(4) was not deducted on the ground that the recipient company enjoys exemption from 13‑4‑1996 to 30‑8‑1996 for which the said company has provided an exemption certificate under section 50(4). This submission was not accepted and the balance purchases of Rs.1,122,043 were subjected to tax under section 50(4) on the ground that the exemption certificate covers only two and one half months of the whole year and the balance amount of Rs.1,122,043 is taken for taxation purpose being not covered by exemption certificate.

The above said issue is not so clear so far as the application of the exemption certificate is concerned. The assessee submission that total purchase was through one invoice and that the exemption was up to 30‑6‑1996 was not appreciated by the CIT. He repeated the same arguments as advanced before the CIT. The documentary evidence, however, has not supported the fact that the certificate was filed for the whole year. Moreover, this purchase was through one consignment and that the Department had allowed exemption to Pakistan Synthetic Limited, needs more enquiries. We, therefore, deem it more appropriate to hold that the assessee shall not be harassed unnecessarily through re assessment on this issue. The provision of section 52 shall only be applied if the facts of this case so warrant under the guideline given by

us on other issues supra. This issue, therefore, is set aside for de novo consideration of the Assessing Officer.

Commission paid to Commission Agent 1995‑96 and 1996‑97

The appellant paid commission to Messrs Shams Brothers Yarn Market, Faisalabad amounting to Rs.204,870 and Rs.165,713 respectively in the assessment years 1995‑96 and 1996‑97. The Assessing Officer asked for its proof and deduction of tax thereon. It was replied that the commission agent deducts their commission from the main payment and retains it with them. The assessee does not pay any amount to them; hence the question of deduction does not arise. Further, said parties are tax payees and for this purpose their N.T.N. was also disclosed. However, their assessment orders could not be produced before the Assessing Officer and were produced before the First Appellate Authority. The CIT(A) did not entertain it as the same were not furnished before the Assessing Officer. The A.R. says assessee earlier refused to furnish a copy but later this assessee succeeded in obtaining the same. The same, therefore, was produced before the First Appellate Authority and now before us. In our opinion there being a reasonable cause the First Appellate Authority should not have refused to entertain this evident. Learned A.R. referred a chain of case‑law to us saying that if the recipient had discharged its obligation there is no reason for holding the withholding agent as assessee in default. He said the purpose of this law stands fulfilled even otherwise. In the present case the assessee had furnished N.T.N. while the order could be furnished at the appellate stage. In such circumstances there was no justification in holding the assessee to be in default.

The learned D.R. did not agree to the same as usual and said that the orders were not produced before the Assessing Officer and the C.I.T. has rightly refused to entertain the same. In our opinion this is not a reasonable method to hold the assessee in default By producing N.T.N. the assessee had fulfilled the requirement. Further the First Appellate Authority should also have not refused to entertain the copies of the order. If this figure was obtaining thereon and the tax has been paid on the basis of the receipts by the said recipient, holding the assessee in default in view of a number of judgments of the I.T.A.T., is E not justified. We, therefore, set aside this point for verification from the order of the said recipient as to whether this amount of commission has been charged to tax in their account or not. On confirmation the Assessing Officer shall accept assessee's contention and if the evidence does not satisfy the requirements of law, the department shall be all liberty to charge tax on the basis of the same.

Payment to building contractors 1996‑97

During this year the payments of Rs.3,573,631 for purchase of building materials were made, out of which 1,511,367 have been subjected to deduction of tax at source under section 50(4) and challans of payments of tax 45,367 have been furnished to the Income‑tax Officer. The balance amount of Rs.2,062,264 was not subjected to deduction of tax at source under section 50(4) on the ground that this amount comprises of amount less than 25,000 which does not attract the provision of section 50(4). The Assessing Officer issued notice under section 52, dated 15‑11‑1997 to give proof of deduction of tax at source under section 50(4) on payments of Rs.3,573;631. In reply to this notice the appellant gave the above reply that was not accepted by the Assessing Officer and the balance payment was subjected to tax under section 52 read with section 50(4). In appeal the C.I.T. Appeals also rejected assessee's contention.

The A.R. said that complete list has been furnished to the Assessing Officer with regard to the purchases that comprises of the amount less than Rs.25,000. He said that not only that the amounts of such purchases were not covered within the charge of section 50(4) but also even otherwise these amounts being counter‑purchases do not attract the provisions. He said that this fact has not appropriately been taken care of either by the Assessing Officer or the C.I.T. as a result of which the charge created under section 52 has become only a bare estimate, which is not permissible under law. These purchases, he remarked, are minor and of inexpensive items, which obviously do not, attract the provisions of section 50(4). Firstly being less than thrashold, secondly; not being for commercial within the definition of supply. This is where we are inclined to go with learned D.R. who said that this matter can only be thrashed out at the stage of the Assessing Officer. The list cannot obviously be checked and verified by the learned Tribunal and the determination as to whether the amounts were less than thrashold and were counter‑purchases is only possible at the assessment stage. The Tribunal obviously cannot go into the details and check the veracity of F each one of them. Even otherwise the assessee also has not furnished any such copy to us so as to involve us in such a working. This issue, therefore, is set aside. The finding given by us in Chenab Fabrics Limited, Faisalabad vide I.T.A. No.749/LB of 1997 (Assessment year 1993‑94), dated 27‑5‑1998 which has since been followed in a number of other judgments and in which the sale and supply has been distinguished, be applied in its letter and spirit.

With the above direction of set aside on this point, the assessee's appeal is decided in the manner and to the extent mentioned hereinbefore respectively in all the years on the respective issues.

C.M.A./M.A.K./343/Tax(Trib.)Order accordingly.