Income Tax Ordinance (XXXI of 1979)-----

----Ss. 55, 62 & 64---Income from business---Reopening of assessment on basis of, inquiry report---Appellate Authority found estimation of sales to be on higher side, while Tribunal upheld order-in-original-- Validity ---Assessing Officer had based estimation of sales mostly upon inquiry report having been made more than one year after expiry of relevant income year and more than six months after expiry of next income year---Inquiry report was not supported by any documentary evidence both regarding availability of stock or capital involved---High Court set aside impugned order and restored that of Appellate Authority.

Mian Ashiq Hussain for Appellant.

Muhammad Ilyas Khan for Respondent.

ORDER

NASIM SIKANDAR, J.---In this further appeal the appellant/ asses see assails the order of the Income Tax Appellate Tribunal recorded on 16-7-1999 on the departmental appeal restoring the assessment order earlier recorded on 30-6-1998 in respect of the assessee for the assessment years, 1995-96 and 1996-97.

2. For the two assessment years involved the assessee returned net income at Rs.35,000 each. The Assessing Officer after receiving inquiry report from the Inspector proceeded to estimate sales at Rs.30 lac and Rs.35 lac for two years involved. The basis of estimate being 5 times of the reported capital at Rs.6 lac. The assessee was allowed expenses at Rs.100,000 and Rs.110,000 and the G.P. of 15% to compute net income for two year at Rs.3,50,000 and Rs.4,15,000.

3. Learned First Appellate Authority A.A.C., Sahiwal partially allowed the appeal by way of order, dated 19-8-1998. The estimation of sales was found to be on higher side while the expenses allowed by the Assessing Officer were found to be on the lower side. Accordingly the sales were reduced to Rs.28,00,000 and Rs.32,00,000 while the expenses were directed to be taken at Rs.1,10,000 and Rs.1,20,000 respectively.

4. Learned Tribunal by way of the impugned order observed that the estimation of sales being based upon the stock reported by the Circle Inspector, learned First Appellate Authority was not justified in allowing the impugned relief.

5. Heard the learned counsel for the parties. According to the learned counsel, the petitioner is a small shopkeeper at Renala Khurd who could not achieve the estimated turn over. Further contends and we will agree that the estimation of sales by the Assessing Officer being based mostly upon the inquiry report made more than one year after the expiry of income year, 1995-96 and more than six months after the expiry of the income year, 1996-97 the paltry relief allowed by the First Appellate Authority should not have been interfered with more so when the inquiry report was not supported by any documentary evidence both as regards the availability of stock or the capital involved.

6. That being so, the impugned order of the Tribunal is set aside which will result in restoring the order of learned First Appellate Authority and the relief allowed thereby to the assessee.

7. Appeal allowed.

S.A.K./P-163/LAppeal allowed.