I.T.As. Nos.5570/LB of 2002, 4793/LB of 2003, decided on 12th August, 2005. VS I.T.As. Nos.5570/LB of 2002, 4793/LB of 2003, decided on 12th August, 2005., 2006 PTD-INCOME-TAX-APPELLATE-TRIBUNAL-PAKISTAN 1958 (2005)

Income Tax Ordinance (XXXI of 1979)---

----S.62---Survey for Documentation of National Economy Ordinance (XV of 2000), Preamble---Assessment on production of books of accounts, etc.---Estimation of sales on the basis of survey---Department contended that First Appellate Authority without any cogent reason discarded the estimation of Assessing Officer in adopting admitted sales duly agreed to by the sole proprietor and daughter of the assessee in survey forms duly filled by the daughters of assessee---Survey team comprising of experienced Income Tax, Sales Tax and Military Officers made an agreement with the assessee for power loom and trading business at two places in different cities---Only to hoodwink the Department, the assessee at belated stage had taken plea before First Appellate Authority that they had not made any agreement with the Survey Authorities---Assessee had a proper forum to agitate admitted turnover if found "forced agreement" within reasonable time but assessee accepted said agreement, as such relief given by First Appellate Authority was not based on facts---Validity---First Appellate Authority observed that Assessing Officer blindly followed the disputed survey forms---Appellants had successfully proved that the survey forms were not received by them and that the date had been interpolated on survey forms in respect of the persons who had already discontinued the business---Was obligatory upon the Assessing Officer to investigate the matter and apply his mind in this queer situation when the basis of the order was being challenged forcefully and successfully---First Appellate Authority allowed the appeal except assessment of rental amount and business telephone charges---Appellate Tribunal, after considering findings of First Appellate Authority did not interfere in the order and upheld the same---Appeal filed by the department was dismissed.

S.A. Masood Raza Qazalbash, D.R. for Appellant.

Ahmad Nadeem Ahsan for Respondent.

ORDER

The Department through these two appeals has objected to the two separate impugned orders of the learned C.I.T.(A) dated 22-8-2002 for the assessment year 1999-2000 directing to accept the declared version and the order dated 7-7-2003 for the assessment year 2000-01 on the following grounds:-

2. That the learned C.I.T.(A) without any cogent reason discarded the estimation of Assessing Officer in adopting admitted sales at Rs.2,20,00,000 duly agreed by the sole proprietor Mr. Muhammad Naseem and daughter of assessee Asmi Naseem in survey forms bearing Nos. 27418, 27419 & 567 duly filled in by the daughters of assessee namely Asmi Naseem and Saima Naseem. Third survey form dated 28-8-2000 was filled in by Mst. Asmi Naseem, daughter of assessee at Lahore and turnover was duly agreed upon before the Survey Authorities signed by the officer at Rs.70,00,000, Rs.70,00,000 & Rs.80,00,000 respectively totaling (Rs.2,20,00,000).

3. That Survey Team comprising of experienced Income Tax, Sales Tax and Military Officers made an argument with the assessee for power loom and trading business at Multan as well as at Lahore. Only to hoodwink the department, the assessee at belated stage has taken plea before the learned C.I.T.(A) that they have not made any agreement with the Survey Authorities. Assessee had a proper forum to agitate admitted turnover if found "forced agreement" within reasonable time but assessee accepted said agreement so relief given by learned C.I.T (Appeals) is not based on facts.

4. That Assessing Officer rightly made assessment at net Income of Rs.37,47,915 and separately accepted the plea of lady assessee at N. T. Nos. 04-27-0124413 & 04-27-1002775 regarding discontinuation of their power loom business in their individual hands by assessing officer their knitting and sewing income.

5. That negation of agreement made before the Survey Authorities after long time is quite evident to avoid incidence of high taxation.

We have heard the learned representatives of both the sides and have also perused both the impugned orders of the learned C.I.T.(A) and the assessment order.

Regarding the appeal for the assessment year 1999-00, we have found that the learned C.I.T.(A) has directed to accept the declared lease income with the following observations:---

"The assessing officer misconstrued the legal terminology of clause (10) of the lease deed dated 3-7-1996. The assessing officer failed to bring on record any solid material to rebut the valid claim of lease income of the appellant in the presence of valid lease deed. Moreover, the lessee Asmi Naseem existing assessee at NTN 04-27-0124413 has already declared income from both sources i.e, Naseem Silk Mills (Head Office), Multan and Messrs Saqib Brothers Branch at Lahore, Therefore, it is prima facie that there is the double taxation of which law does not give permission. Moreover, the appellant has history of acceptance of declared lease. income i.e. in the assessment years 1997-98 and 1998-99. No plausible explanation was given by the assessing officer to depart from wording of clause (10) of the lease deed. I find that the A.R.'s arguments have weight. I find no solid reason to estimate the income from Messrs Saqib Brothers, Lahore when the same already stands declared in the hands of the lessee therefore, I cancel the estimation of self trading business of the appellant from Messrs Saqib Brothers, Lahore and direct the assessing officer to accept the declared lease income of Rs.96,000 only."

After considering the above observations by the learned C.I.T.(A), we are of the view that he has rightly directed to accept the declared lease income and no interference is required in the matter. The appeal filed by the department for the assessment year 1999-00 is, therefore, dismissed.

Regarding the appeal of the department for the assessment year 2000-01, we have found that the grounds as framed by the appellant department are vague, unspecific and against the Income Tax Appellate Tribunal's Rules. Even otherwise, we have found that the learned C.I.T.(A) has discussed all the relevant issues in detail and on each of the issue, he has given full justification. The relevant portions of the impugned order are reproduced hereunder:---

"(e) Rental amount of the business accommodation has been properly surveyed and is correctly assessed. The telephone bills used at the working premises are also maintained to be in order.

Upshot of the whole discussed and deliberations made above, it is generally observed during the course of the hearing and examination of the record that the lower authority could not bring forward any substantial record or reasons in support of the impugned assessment and at every juncture his way of conducting the case remained evasive. Tax is not a forced liability but in fact is a responsibility to owe to the State a proportionate share given by the assessee for utilizing and consuming the services provided by State, its determination must be made with a view to keep the above said principle intact and to maintain confidence and to boost the encouragement in the tax paying society so that tax should not be taken by the concerned public to be a harsh imposition but a duty. It is high time to develop tax culture in the working classes which will help the enforcement of self-assessment at large and the tendency of concealment of taxes shall be gradually discouraged and public would rather prefer to be the tax payer instead of tax swallowers. The assessing officer blindly follows the disputed survey forms. The appellant had successfully proved that the survey forms were not received by them. Also proved that the date has been interpolated on survey forms in respect of the persons had already discontinued the business. It was obligatory upon the assessing officer to investigate the matter and apply his mind in this queer situation when the basis of the? impugned order is being challenged forcefully and successfully. Under the circumstances, I have no option but to allow the appeal except assessment of rental amount and business telephone charges".

After considering the above findings of the learned C.I.T.(A), we find no warrant for interference in the impugned order, which is upheld and the appeal filed by the department for the assessment year 20.00-01 is also dismissed.

Both the appeals filed by the department for the assessment years 1999-00 & 2000-01 are dismissed for the reasons as mentioned supra.

C.M.A./516/Tax(Trib.)???????????????????????????????????????????????????????????? Appeals dismissed