1997 PLP (Trib (PTD)

Rs.60,000 Total G. P Less: Expenses on estimate. Rs:20,000 Net income.

2. The assessee's reply was that he did not conduct any business during the year under revision as his arm had been fractured. The explanation was not accepted and assessment was framed on the basis of estimate communicated vide notice issued under section 62.

3. In appeal before first forum, the learned CIT (A) found that the assessee did not comply with the notice issued in spite of proper service. The appeal was, therefore, disposed of ex parte based on the merit of the case. The treatment meted out by the assessing officer was confirmed as, according to the CIT (A), "there is -no evidence to contradict the findings of the assessing officer".

4. In appeal before us the learned counsel of the appellant was of the view that reasonable opportunity had been denied at the first forum and the assessed income was neither based on "sound footings or good reasons". Objection was also taken to the basis of assessment i.e. the inspector's report which was said to be without any substantive material evidence and proof.

5. The learned D.R. supported the action of the authority below and was of the opinion that the assessee had no way been able to substantiate his own submission that no business had been conducted and as such nil income was derived during the year under, appeal.

6. Both the parties have been heard and the issues raised considered and examined with reference to the facts on record.

7. The appellant has not been able to justify the non-compliance to the notice issued by the CIT (A), his findings are explicit and clear. Notice for hearing had been served properly upon the appellant. The opportunity afforded to the assessee for redress of grievance before the first forum have not been availed of. No cause for grievance or interference on this issue arises.

8. The plea that no business was conducted during tile year under appeal and subsequently no income arose has not been substantiated or proved at any stage. The reason given that the assessee had fractured his arm which did not allow him to do any business. This plea, in the first instances, is not supported by any evidence. Secondly, even if an arm is fractured the incapacitation or hindrance in work is not to that extent which would continuously confine a person to bed for a full year. Thirdly; the appellant's source of income is not from any physical work or labour where a fractured arm hampers him from earning his likelihood. The appellant s claim that he did not carry out any business and had discontinued as a Director of Tanzed Industries (Pvt.) Ltd., Faisalabad (from wherein he was deriving salary) is a response aft' the Department had required him to substantiate his plea that there was no business. Prior to it there was no information intimation with the Department. The appellant's involvement in cloth business had been verified from a spot inquiry contents of which were brought to his knowledge through a notice under section 62. 9: The assessee had a capital of the Rs.2,02,790 as on 30-6-1952 out of this he is said to have spent Rs.24,000 on his house hold cx11cnscs tsar the year under appeal (1992-.93). Subsequently, the remaining capital was invested in M/s. Alnoor Fabrics (Pvt.) limited, f Faisalabad from wherein he was in receipt of interest income, accordingly declared for the assessment year 1993-94 and a statement under section 143-B filed.

10. From the above going narration we are of the view and opinion that the appellant has not been able to substantiate the submission that there was no income during the year under appeal. Similarly, expenditure of Rs.24,000 for the full year specially when the assessee claims to have been under medical treatment is insufficient. On the other hand the basis of estimate i.e. the inspector's report is not supported by sufficient evidence and proof. Keeping in view the capital available to the assessee during the year under appeal and income -assessed at Rs.46,000 in 1991-92 we would deem it reasonable to reduce the income to Rs.50,000.

11. The appeal succeeds to the extent indicated above. M.B.A./188/T Order accordingly.