COMMISSIONER OF INCOME TAX, FAISALABAD VS RAHIM COTTON FACTORY, FAISALABAD, 2006 PTD-LAHORE-HIGH-COURT-LAHORE 1525 (2005)

Income Tax Ordinance (XXXI of 1979)---

---S.136(1)-Appeal to High Court against orders of Appellate Tribunal and Appellate Authority made solely on factual controversy---Maintainability---Filing of appeal before High Court on pure question of fact not a correct approach---High Court declined to entertain such appeal.

Mian Yousaf Umar for Appellant.

Date of hearing: 19th December, 2005.

ORDER

Departmental appeal before Tribunal, against the order, dated 23-10-1991 of Appellate Authority C.I.T.(A) Zone III was dismissed vide order, dated 23-12-1997. The Appellate Tribunal was pleased to hold:

(i) That addition of Rs.519,220 under the head, purchase of Kapas, was deleted on the basis of parallel case by the appellate authority cannot be interfere with.

(ii) Yield shown in ginning account cannot be assessed on the basis of sale late disclosed, parallel cases on account of poo: quality of cotton purchased. Since parallel cases have not been challenged in appeal therefore deletion of addition cannot be held to unjustified.

(iii) Operating expenses at the declared rate were found to be on higher side which resulted into addition of Rs. 47,020. Appellate Authority found that disclosed expense in parallel cases have been accepted by the Department therefore the authority deleted the addition. It was found that there was no reason to oblige the Revenue for reversal of addition.

(iv) Addition of Rs. 29,000 in lint account was contested due to fire in factory which damaged the lint. First Appellate Authority noted addition has been made in hasty manner. There was no evidence to contrary to the contention of assessee. Addition was deleted by First Appellate Authority and it was held that impugned deletion is not open to exception.

(v) Round addition of Rs. 10,000 an average sale was held by First Appellate Authority as unjustified. It was held that round addition in trade account should be avoided as far as possible and such action in account cases is totally unjustified.

(vi) Addition of Rs.73,052 was made at average sale rate of oil. Addition was made without any notice to assessee under section 62 of the Ordinance. Addition was deleted by First Appellate Authority as lowness of yield of oil without quoting any parallel case was conceded by the Revenue. It was held that deletion was rightly made.

(vii) Claim of crushing expenses at Rs.219,701 yielding average crushing expense at Rs.3,68 per maund, was found excessive. The difference of Rs.10,754 was 'accordingly added towards income. First Appellate Authority deleted the addition while agreeing with the assessee much higher rate was allowed to comparable cases. Conclusion of Appellate Authority was held correct.

(viii) Sale of oil weighing 7144 maund and 12 Srs. for a consideration of Rs.2,267,157 was found ridiculously low when compared with three (3) parallel cases. Assessing Officer made addition of Rs.128,592. Appellate Authority deleted the addition on the score that parallel cases referred by Assessing Authority were from a different place of business. Parallel cases quoted by assessee show that department has accepted the sale rate at Rs.317.34. Deletion of addition by Appellate Authority was found untenable.

(ix) An addition of Rs.250,000 was made in sale of cake account as Assessing Officer found disclosed rate i.e. 6596 per mound, low when compared with parallel case. Appellate Authority considered the reply of assessee satisfactory that Revenue has adopted rate at 59.84 and rate disclosed, higher rate than parallel cases at Multan. It was held that impugned deletion by Appellate Authority cannot be disbursed.

(x) Learned Tribunal, observed that grounds of appeal before ITAT do not confirm to requirement of Rule 10 of ITAT rules 1981.

2. Revenue assailed the order of learned Tribunal in the instant appeal on the following question:---

"Whether on facts and circumstances of case, the learned Tribunal as justified to change its opinion, when no new facts or material was brought on record?"

3. We have gone through the order of the learned Appellate Tribunal as well as the Appellate Authority and have found that the decisions are made solely on factual controversy. The appellant has not drafted the appeal in accordance with the relevant rules. The assessee is involved in litigation since 1988-89. The matter involved in the instant appeal is a pure controversy of facts and the question framed has no nexus with the matter involved in the instant appeal. Filing of appeal on pure questions of fact in this Court, is not correct approach of Revenue, which should be discouraged to avoid frivolous litigation and lessen the agony of assessee. We are not inclined to entertain this appeal, which involves factual controversy.

S.A.K./C-13/L?????????????????????????????????????????? ?????????????????????????????????????????Appeal dismissed.