2001 PLP 2251 (PTD)

NASIM SIKANDAR, J.‑‑‑-This reference under section 136(1) of the Income Tax Ordinance, 1979 has been made at the instance of a registered firm which during the relevant period derived income from execution of contracts from various Government Departments.

2. The following questions of law have been framed by the Lahore Bench of the Income‑tax Appellate Tribunal for our consideration and reply;‑‑‑ "(a) Whether in the facts and circumstances of the case the. Tribunal was justified in relying upon the past history when the Assessing Officer himself deviated from the past history, by resorting to the application of N.P. rate and subsequently in assessment year 1981‑82 to G.P. rate of 17‑1/2%? (b) Whether the discriminatory treatment of the Courts below as given to the petitioner/assessee is infringement of fundamental rights as provided in the Constitution of Pakistan, when the lower G.P. rate was applied to all other contractors in Mianwali Circle, while the petitioner subjected to G.P. rate of 20% on the same nature of contract?"

3. For the assessment years 1978‑79 and 1979‑80 the assessee returned income at Rs.1,06,460 and Rs.62,

870. The declared version was not supported from books of accounts. It, was claimed that these were lost in transit while shifting the head office of the firm from Lahore to Mianwali. The Assessing Officer though accepted the declared receipts yet proceeded to apply a rate of 20 % as per history. yet proceeded to‑ apply a rate of 20 % as per. history of the film. The learned C.I.T. (Appeals), however, reduced the rate to 15 % and 16 % for the two assessment years involved. On agitation before the Tribunal, the Department succeeded after its contention was accepted that the history of an assessee is the best guide. Thereafter, at the request of the assessee, the aforesaid two questions were framed for our reply and answer.

4. After hearing the learned counsel, we are of the view that none of the two questions raises a legal controversy. The application of a gross profit IA rate to a particular trade or, business, in the given situation, does not give rise to a legal controversy to be resolved by this Court. The issue if a particular rate of profit is not possible in a particular trade is again not a question to be answered by this Court. The fact that in certain years the receipts of an assessee were subjected to a particular gross profit rate and that in subsequent years the achievement of that rate was no more possible again is predominantly a question of fact.

5. In a number of recent opinions, we have expressed that only a substantial question of law needs to be referred to this Court. As observed earlier, neither of questions give rise to a legal controversy much less to say of a substantive question of law. Therefore, we will refuse to answer the same.

6. Answer declined C. M. A. /M. A. K./A‑223/L Order accordingly