1988 PLP 998 (PTD)

RUSTAM S. SIDHWA. J.--This order will dispose of five Tax References P.T.R. Nos. 1 of 1988 to 5 of 1988 filed under section 136 (2) of the Income Tax Ordinance, 1979 by Messrs Afzal Brothers Steel Industries, petitioner, calling upon this Court to frame five questions of law, that arise out of the Tribunal's order dated 8-10-1987, for determination.

2. The petitioner is an association of persons within the meaning of the Income Tax Law. It filed returns for the assessment years 1981-82 to 1985-86, pursuant to notices issued to it by the Income Tax Officer, Special Circle-3, Zone-A, Lahore, under section 56 of the Income Tax Ordinance, 1979. The production figures of the assessee were accepted on the basis of certificates of production issued by the Central Excise Department for all the assessment years, but the assessee's contention that re-rolling had been done for others was not accepted, as the assessee could not furnish details or particulars of persons for whom re-rolling was done and the re-rolling was treated as done by the assessee on his own account, which was subjected to average sale rate at Rupees Four Thousand Five Hundred (Rs.4,500) per ton for the first three years, at the rate of Rupees Four thousand eight hundred (Rs.4,800) per ton for the fourth assessment year and at the rate of Rupees five thousand four hundred (Rs.5,400) per ton for the last assessment year. Applying gross profit rate of 12%, the gross profit was worked out and after allowing for estimated expenses, the net income was deduced and assessed.

3. Being aggrieved by the aforesaid orders, the petitioner preferred five appeals before the appellate Assistant Commissioner of Income Tax 'C', Lahore. Once again the petitioner took up the plea that re-rolling was done for others, which plea was rejected as the petitioner produced no evidence in his support. As regards the production figures taken from the Central Excise Records and the average sale rate per ton prevailing in the market at the material time regarding each assessment year, the same were not contested in the grounds of appeal nor any evidence was produced to indicate they were excessive. As regards the gross profit rate, which was the only issue agitated by the petitioner, the Appellate Court upheld the rate, as it had applied the ,said rate in the case of Munir Steel Mills also.

4. Being aggrieved by the Appellate orders, the petitioner filed five appeals before the Income Tax Appellate Tribunal (Pakistan), Lahore. The Income Tax practitioner appearing on behalf of the petitioner only assailed the excessive estimate of sale and the gross profit rate applied by the lower Courts before the Income Tax Appellate Tribunal. He, however, admitted that no accounts were being maintained, that the estimate of sales was made correctly on the basis of the Excise Record and 12% gross profit rate was also the declared rate of the appellant. In this view of the matter, the Tribunal refused to interfere and confirmed both the estimated sales and the rate of the gross profit, as applied by the Income Tax Officer. The five appeals were accordingly dismissed.

5. Not being satisfied by the above findings, the petitioner filed five applications under section 136(1) of the Income Tax Ordinance, 1979, before the Income Tax Appellate Tribunal to draw up a statement of the case so as to refer the following five questions of law for determination by the High Court: "(1) Whether the order of the Tribunal in appeal is a speaking order and is fit to be maintained? (2) Whether, on the facts and in the circumstances of the case, particularly in view of the fact that the proceedings for assessments for the years 1981-82, 1982-83, 1983-84 and 1984-85 were commenced on 15-6-1985 with the issue of notice under section 57, the ITO was vested with proper jurisdiction to make the assessments for these years, and the Tribunal was right in confirming them (3) Whether on the facts and in the circumstances of the case there was material and basis for the ITO to hold that the assessee was doing business of steel re-rolling of his own goods, against the assessee's claim that he was only working for mazdoori for others? (4) Whether on the facts and in the circumstances of the case, and in the absence of any parallel case, with which the assessee was confronted, the Tribunal was right in confirming the G.P. rate of 12% applied by the I.T.O., and whether there was material or basis for the Tribunal for so doing? (5) Whether on the facts and in the circumstances of the case the Tribunal was right in confirming the sale rates taken by the I.T.O. without confronting the assessee with the alleged average market sale price? The Tribunal rejected the said applications as the question of law sought to be referred did not arise out of its order.

6. Being aggrieved by the above orders, the petitioner has filed the present references before us, so that we may frame questions of law, as suggested.

7. We have heard the arguments of the learned counsel for the petitioner. With regard to the first question of law stated, the order of the Tribunal is a speaking order. Only two matters were raised, which concerned questions of fact, which were disposed of.

8. With regard to the second question of law sought to be raised, the first assessments made in respect of the five assessments years in question were under section 62 of the Income Tax Ordinance after notice had been issued under section 56 thereof. In these circumstances, section 65 of the Ordinance was not applicable.

9. With regard to third, fourth and fifth questions of law sought to be raised, there are nothing but permutations and combinations of questions of fact, which have already been answered by the three Courts below, The petitioner did not submit any documents or material to rebut the findings given by the Courts below. The production figures were taken from the certificates submitted by the Central Excise. The average sale rates per ton fixed for the different assessment years were according to those prevailing in the market. No material was supplied by the petitioner to show that the rates were less. The gross profit rate of 12% which was applied by the Income Tax Officer, was also confirmed by the Appellate Assistant Commissioner, on the basis that he had upheld this rate in the case of another assessee i.e. Munir Steel Mills. No document or evidence was supplied by the petitioner to show that the gross profit rate was excessive.

10. In fact no questions of law arise out of these findings of facts arrived at by the three Courts below.

11. There being, no merit in these five petitions, the same are dismissed in limine. M.B.A./ A-427/L Reference applications dismissed.