COMMISSIONER OF INCOME-TAX, COMPANIES, LAHORE VS MESSRS NIRALA (PVT.) LTD., LAHORE
2002 P T D 464
[Lahore High Court]
Before Syed Jamshed Ali and Mian Muhammad Najam-uz Zaman, JJ
COMMISSIONER OF INCOME-TAX, COMPANIES, LAHORE
versus
Messrs NIRALA (PVT.) LTD., LAHORE
Reference Applications Nos.3 and 4 of 1992, heard on 08/03/2000.
Income Tax Ordinance (XXXI of 1979)---
----S.136(1)---Reference to High Court---Question of fact---Question whether the assessee was a manufacturer or selling sweets on commission basis, was a question of fact---High Court declined the references.
Muhammad Ilyas Khan for Petitioner.
Ilyas Zafar, D.R. for Respondent.
Date of hearing: 8th March, 2000.
JUDGMENT
SYED JAMSHED ALI, J.---This judgment will dispose of Tax Reference No-4 of 1992 as well because in both the references the following question has been raised:---
"Whether on the facts and in the circumstances of the case the Tribunal was justified in holding that the assessee selling goods under his brand name can be held to be a commission agent?"
2. The respondent is a private limited company, who is engaged in the business of selling sweetmeat in the name of Nirala Sweets and is also engaged in the local and export sales of carpets. The controversy in both the cases, however, relates to the sweetmeat business of the respondent. Assessment in this case for 1987-88 was made under section 62 of the Income Tax Ordinance. The respondent was treated as a manufacturer against his declared version that he was selling sweets on commission by purchasing it from other manufacturers.
3. A similar controversy has arisen in Reference No.4 of 1992 which pertains to the assessment year of 1988-89.
4. In both the cases the assessment order was passed by the Income-tax Officer on 28-6-1988. Separate appeal was taken by the assessee before the Commissioner of Income-tax.
5. As far as the account of the sweets is concerned, the assessment made by the Income-tax Officer was set aside "for checking up further the factual position about the so-called arrangement of benami manufacturers". This was vide separate orders, dated 15-5-1989.
6. Still dissatisfied the petitioner filed appeals before the learned Income-tax Appellate Tribunal which were allowed vide order, dated 12-11-1990. It was found that the respondent was not a manufacturer but was selling sweets on commission by purchasing it from other manufacturers.
7. The department approached the learned Income-tax Appellate Tribunal with an application under section 136(1) of the Income Tax Ordinance. The learned Tribunal dismissed it vide order, dated 27-6-1991.
8. The learned counsel for the petitioner contends that the respondent was selling the sweetmeat in his brand name Nirala and, therefore, it must be held that he was a manufacturer.
9. On the other hand, the learned counsel for the respondent contends that adequate' evidence had been brought on record to demonstrate that the petitioner purchased sweetmeat from different manufacturers who were existing assessees. He further submits that for the assessment years 1983-84, 1984-85 and 1985-86 the Tribunal decided the issue vide order, dated 14-6-1987 with a finding that the respondent was not a manufacturer of sweetmeat. This order was accepted by the Income-tax Authorities and was not further assailed.
10. We have considered the submissions made by the learned counsel for the parties. The learned Tribunal, in the order, dated 12-11-1990 passed on the appeals of the petitioner found that the respondent purchased sweets from Data Sweets, Farooq Sweets and Lahore Food Industries which are separate and distinct entities from the income-tax point of view and Central Excise for which they have been granted exemption from the levy of sales tax. A certificate under the West Pakistan Shops Ordinance, 1968 was also placed on the record in support of the plea that the three aforesaid suppliers were independent entities. It was also noted by the learned Tribunal that the books of the accounts of the assessee also reflected ledger account of the aforesaid suppliers.
11. The question whether the petitioner was a manufacturer or selling sweets on commission basis is a question of fact. No question of law arises to be answered. Both the references are, accordingly, dismissed.
C.M.A./M.A.K./C-130/L??????????????????????????????????????????????????????????????????? References dismissed.