I.T.A. No.1489/KB of 2003, decided on 9th March, 2005. VS I.T.A. No.1489/KB of 2003, decided on 9th March, 2005.
2006 P T D (Trib.) 1351
[Income-tax Appellate Tribunal Pakistan]
Before Jawaid Masood Tahir Bhatti, Judicial Member and Shaheen Iqbal, Accountant Member
I.T.A. No.1489/KB of 2003, decided on 09/03/2005.
Income Tax Ordinance (XXXI of 1979)----
----S. 62-Assessment of production of accounts, evidence etc.---Gross profit rate---Income from dyeing and bleaching business---First Appellate Authority directed Assessing Officer to accept the trading results of the assessee and the gross profit rate 12.54% as shown by the assessee---Department contended that no credence could be attached to the, declared version of the assessee---Assessing Officer had rightly rejected the declared gross profit rate of 10.54% and applied gross profit rate at 18% but the First Appellate Authority without any justification, had directed to accept the declared version---Validity---First Appellate Authority directed to accept the declared gross profit rate after giving due consideration to the facts of the case and specifically for the reason that the Assessing Officer had not pinpointed any specific defect of un verifiability in the accounts and further sales had been accepted as declared---Increase in turnover had not been taken into account while application of history of the case which was very important factor in respect of gross profit rate which had been ignored by the Taxation Officer---First Appellate Authority had rightly directed to accept the declared gross profit rate and order of First Appellate Authority was upheld by the Appellate Tribunal.
Ms. Farzana Jabeen, D.R. Appellant.
Abdul Raheem Lakhani for Respondent.
Date of hearing: 17th February, 2005.
ORDER
The department through this appeal has objected to the impugned order of the learned CIT(A), dated 30-6-2003 for the assessment year A 2002-2003 directing to accept the trading results of the assessee and the GP @ 12.54% as shown by the assessee.
Ms. Farzana Jabeen representing the appellant-Department has contended that the assessee, in this case, is a Unregistered Firm deriving income from dyeing and bleaching business. She has contended that previously the assessment was completed under Self-Assessment Scheme up to the assessment year 2001-2002 except assessment year 1995-96, which was, however, proceeded under normal law. According to the learned DR, some of the trading/manufacturing expenses like wages, water charges, stores and spares and generator expenses are not either verifiable or supported by Kacha bills and it has rightly been observed in the assessment order that no credence could be attached to the declared version of the assessee, therefore, the Assessing Officer has rejected the declared GP rate of 10.54% and applied GP rate at 18%, but the learned CIT(A), without any justification, has directed to accept the declared version.
On the other hand, Mr. Abdul Raheem Lakhani, Advocate has appeared on behalf of the assessee/respondent and has submitted that the Assessing Officer has failed to specify any instance of unverifiability despite the fact that the books of accounts were admittedly produced. and were examined by the Assessing Officer. He has contended that the GP rate as applied by the Assessing Officer was bald and based on the assessment year 1995-96 whereas for the year under review, the declared turnover was only Rs.5,06,545 which is much less than the declared turnover of Rs. 12,34,17,591 during the year under appeal. According to the learned counsel, the learned CIT(A) has, therefore, rightly directed to accept the declared GP rate.
We have heard the learned representatives of both the parties and have also perused the impugned order of the learned CIT(A), the assessment order and other relevant record of the case.
We have found that the learned CIT(A) has directed to accept the declared GP rate having given due consideration to the facts of the case and specifically for the reason that the Assessing Officer has not pinpointed any specific defect of unverifiability in the accounts and further sales have been accepted as declared. Moreover, increase in turnover has not been taken into account while application of history of the case which is very important factor in respect of GP rate which has been ignored by the Taxation Officer. We are, therefore, of the view that the learned CIT(A) has rightly directed to accept the declared GP. rate. The impugned order of the learned CIT(A) is upheld.
The appeal filed by the department is, therefore, dismissed.
C.M.A./519/Tax (Trib.)Appeal dismissed.