1980 PLP (Trib (PTD)

P L D 1975 Lah. 44 and P L D 1970 S C 173 eel. Sidat Hyder Aslam & Co. C. As. for Appellant. Nemo for Respondent. A. A. ZUBERI (MEMBER).‑The Assessee is a `company' who acts as a manufacturer and vendor of Pharmaceuticals. The Appeals are directed against the learned Appellate Assistant Commissioner ..Range, Consolidated Order No. 324, 3582545/76‑77 dated 27‑11‑1976 relating to assessment years 1971‑72, 1972‑73 and 1973‑

74. None was present for the Department when called out. The appeals were, therefore, heard under rule 25 of the Income‑tax Appellate Tribunal Rules, for decision on `merits'. Logs of Assets in East Pakistan.‑The Assessee had claimed a sum of Rs. 8,79,524 as loss of current `assets' in East Pakistan. This sum, in fact, represented the `net' excess of current assets over current liabilities. As the books of accounts were closed on 31st December, 1971 (for the year 1972‑73), the adjusting entries could not be made in the books of accounts. However, the claim was made in the computation filed with the Return for 1972‑

73. As a protective measure, claim was also made in 1973‑74 but at the time of hearing it was pleaded that the write off should be allowed in the assessment year 1972‑

73. The Assessing Officer did not admit the claim arguing that in the assessment year 1972‑73 the loss had not been actually charged to the accounts and the allegedly non‑recoverable current assets appeared in the Balance‑Sheet. Another argument adopted by the Assessing Officer for disallowance was that the Assessee was a subsidiary to an international organization known as S . . L . . . (Basle) and thus the possibility of the parent company or principal negotiating with the Government of B ., . . D . . . . for the recovery of the assets could not be ruled out. The write off was consequently not allowed in either of the two years. This the learned Appellate Assistant Commissioner confirmed with a very convenient and the often repeated patent phrase. "There is no force in the arguments of the Authorised Representative. I am inclined to agree with the finding of the Assessing Officer .. . . ". The Assessee claimed exemption for an amount of Rs. 74,708 in 1972‑73 and for a sum of Rs. 14,23,988 in the assessment year 1973‑74 which were said to have been occasioned due to devaluation of the Pakistan Rupee. It was explained to the Assessing Officer that the Assessee had a Bank A/c in S . . . . where the contribution of foreign share‑holders was deposited and was to be utilised towards meeting the cost of plant, machinery, equipment etc. The balance standing in this accounts was in terms of foreign exchange current assets but was converted into Pakistan Rupee, at the time of drawing the Balance‑Sheet. The closing balance in S . . . F . . . was converted into Pakistan Rupees at the prevailing rate which at times gave a loss and at times gain, but both of these were of capital ' nature, not liable to either set‑off against, or inclusion in, the Income. It was submitted with certainty that no business transaction had taken place and, therefore, the loss of gain emerged as a result of variance in exchange rate could not be termed as income. For this assertion certain decisions of the Tribunal were quoted before the Assess ing officer which he mentioned in the assessment. Although in Assessee's own case in the preceding year the Tribunal vide I. T. A. No. 2306/KB of 1972‑73 decided on 16‑4‑1975 had held the loss in that year as of capital nature, the Assessing Officer did not accept Assessee's plea and taxed the surplus in both the years. This the learned Appellate Assistant Commis sioner confirmed with the brief observation: There is no force in the arguments of the learned Authorised Representative", which has now become too familiar to us. Although arguments were addressed to us by tire learned Authorised Representative for the Assessee, on the merits (or demerits) of the case we do not feel called upon to adjudicate upon the two issues, in view of the summary manner (and the annoyingly brief observation) with which the learned Appellate Assistant Commissioner does not manifest whether the action of the Assessing Officer could (or could not) be assailed before him and, although he reproduced the explanation tiled by the Assessee, both with regard to loss of assets in East Pakistan and the exchange gain, the arbitrariness in the order is glaring because he did not record any justi fication for reaching the conclusion against the Assessee. In fact, with that same case he could accept the appeal by observing: "There is force in the arguments of the learned Authorised Representative . . . . " This, by no standards in a lawful disposal of the appeals. The passing of a summary order has been held to be devoid a lawful authority and of no legal force by the learned Judges of the Lahore High Court in a case reported as P L D 1975 Lah. 44 wherein their Lordships had in their mind a pronouncement of the Supreme Court of Pakistan PLD 1970 S C 173 adjudging an order disposing of the matter in a summary manner, having no spelled out reasons,, as `not' lawful'. Weighing on this scale, set up by the superior Courts, we find that the decision now impugned before us is not a speaking order and has no imprint of the effort, if any, made by the learned Appellate Assistant Commissioner to decide the case in a judicious manner. On the other hand it smacks of arbitrariness and deprives the higher Appellate Authority of appreciating the circumstances which influenced the learned Appellate Assistant Commissioner so as to discard the arguments advanced on behalf of the assessee. The order of the learned Appellate Assistant Commissioner is clearly devoid of lawful authority and is of no legal consequence. We, therefore, VACATE the order and REMIT the case back to him for decision de novo after ascertaining facts, evaluating evidence in the light of the relevant enactment and the case‑law. Case remanded.