2005 PLP (Trib (PTD)

Judicial Member AMJAD ALI RANJHA (ACCOUNTANT MEMBER).‑‑‑I beg to differ with the findings of my learned brother (Judicial Member) regarding the acceptance of appeal of the assessee. I do not agree with the findings of my learned brother (J.M.) as given on page‑4, where he states that there is no reason of pitching the sales to a figure other than what has been determined by the Sales Tax Department without any other substantial or objective reason or proof in this case. Since such a proof is missing in this case, we direct that the sales determined by the Sales Tax Department may be adopted. Sales in this case have been declared at Rs.30,03,996, which have been determined at Rs.40,00,000 and AAC has reduced them to. Rs.38,00,

000. My learned brother is only relying on one thing and that is the sales adopted by the Sales Tax Department, whereas he is ignoring all other important facts of this case. It is important to note that the assessee has declared its income at Rs.54,349 which is ridiculously low in this line of business as it is not even equivalent to a Grade‑I employee of Government of Pakistan and the assessee is deriving income from manufacturing polythene bags. Moreover, his finding that sales should be accepted seems incongruous, especially when he is not satisfied with the application of GP rate. It is very interesting to note that in the assessment year 2000‑2001, electricity consumption has been declared at Rs.7,40,883 and Sui gas consumption at R ..1,82,254 giving total power consumption at Rs.9,23,137 with declared sales at Rs.30,03;996, which is not even 4 times of the consumption of power. But in the assessment years 2001‑2002, the assessee has consumed electricity worth Rs.8,02,14 and sui gas worth Rs.2,50,997 giving total power consumption at Rs.10,53,011 and has himself declared sales at Rs.55,45,180 which has been estimated at Rs.58,00,000 meaning thereby that sales were more than five times the consumption of power. Since it is a no accounts case, hence I am fully convinced that the estimation of sales in the assessment year, 2000‑2001 at Rs.40,00,000 by the department is still on the lower side and it should have been more than Rs. 45,00,000 based on the declaration made by the assessment himself in assessment year 2001‑2002. But since the department is not in appeal, hence I think that I have no other alternative except to confirm the sales as adopted by the AAC in his Order No.97, dated 20‑6‑2001. Similarly, since there is nominal increase on the part of the department in the next year at Rs.58,00,000 against declared at Rs.55,45,180, hence it also does not call for any relief. Hence, I am in favour of rejecting both these appeals. (Sd.) (Amjad Ali Ranjha) Accountant Member As the difference of opinion has arisen between the members of this Bench, hence the case is referred to the Hon'ble Chairman for nomination of a 'third member to resolve the following question:‑‑ Whether in view of the facts and circumstances of the case, assessee's appeals need to be accepted or rejected. (Sd.) (Sd.) (Khawaja Farooq Saeed) (Amjad Ali Ranjha) Judicial Member Accountant Member MUHAMMAD TAUQIR AFZAL MALIK (JUDICIAL MEMBER).‑‑‑This is a difference of opinion case entrusted to me by the honourable Chairman for resolving the following question:‑‑ "Whether in view of the facts and circumstances of the case assessee's appeal needs to be accepted or rejected?" Arguments from both the sides have been heard and record perused. The AR of the assessee has further given three photocopies of orders one is in I.T.A. No. 5100/LB of 2002 for the charge years 2001‑2002, dated 14‑12‑2002 bearing NTN 3‑42‑0682254 in which the difference of opinion has been resolved by majority view accepting the trading account. The trading account was on the basis of audited results by General Sales Tax Department. The sales in this case were accepted by the majority view as declared before the Sales Tax Department. The other two assessment orders are for the charge years. 2001‑2002 and‑ 2002‑2003 bearing NTN Nos. 31‑20‑1282227‑2, dated nil and 31‑77‑7032657, dated 22‑1‑2003. These are two assessment years in which the Department had accepted the sales in the income‑tax returns which have been arrived at by the General Sales Tax Audit Department. These assessments do not have binding force on this Tribunal but it has got a persuasive value and cannot be ignored being on the same issue. In view of the Judgments cited supra and after going through the orders of the learned Judicial Member I agree with the conclusion of the learned Judicial Member who has accepted the appeals of the assessee for both the years to the tune of sales only. On the issue of G.P. rate and P&L add backs, the appeals have not been accepted. Therefore, my opinion on this issue is that the assessee's appeals need to be accepted to the extent as ordered by the learned Judicial Member. I agree with his finding on the reasoning given by the learned Judicial Member. The nutshell of the above discussion is that both the appeals of the assessee are accepted by majority view. (Sd.) (Muhammad Tauqir Afzal Malik)); Judicial Member C.M.A./319/Tax(Trib.) Appeals accepted.