1990 PLP 407 (PTD)
Messrs ZAIN PACKAGING INDUSTRY LTD. Versus COMMISIONER OF INCOME‑TAX, CENTRAL ZONE, KARACHI
| Citation | 1990 PLP 407 (PTD) |
| Forum / Court | Karachi High Court |
| Bench Members | Saeeduzzaman Siddiqui and Imam Ali G. Kazi, JJ |
| Parties | Messrs ZAIN PACKAGING INDUSTRY LTD. Versus COMMISIONER OF INCOME‑TAX, CENTRAL ZONE, KARACHI |
Q1: What are the key laws and sections cited in 1990 PLP 407 (PTD)?
This judgment primarily cites: statutory provisions as referenced in Pakistani case law index.
Q2: Which judicial bench decided the case 1990 PLP 407 (PTD)?
The case was heard and decided by the Karachi High Court bench comprising: Saeeduzzaman Siddiqui and Imam Ali G. Kazi, JJ.
Q3: What is the official citation format for this judgment on Pakistan Law Portal?
Cite this legal precedent as: 1990 PLP 407 (PTD) (Messrs ZAIN PACKAGING INDUSTRY LTD. Versus COMMISIONER OF INCOME‑TAX, CENTRAL ZONE, KARACHI). Read the full summary and cross-referenced laws free on Pakistan Law Portal.
Representation
- Shaikh Haider for Respondent.
- Date of hearing 30th August, 1989.
- Mr. Sirajul Haq, learned counsel for the applicant contended before us that there was no material or record before the Income‑tax Tribunal to reach the conclusion that the books of account maintained by the applicant were not props or that it was maintained in a manner which made impossible for the Assessing Officer to correctly calculate the real income of the assessee. It is urged by the learned counsel that in the previous years, the accounts were maintained in a similar manner and the book results disclosed by the assesses always accepted by the Department. It would appear from the order of the Tribunal that the book results were rejected on the ground that no regular manufacturing record was maintained by the assesses to co‑relate the same with the production. It is not disputed by the learned counsel for the Department that in the past years in which the book results of .the applicant were accepted no such manufacturing record was maintained by them. In fact from the order of the Appellate Assistant Commissioner of Income‑tax as well as from that of the Income‑tax Tribunal it would appear that the explanation offered by the assessee for drop in the gross profit rate was partially accepted by the Department. In our view neither in the order of the Assistant Appellate Commissioner nor in the order of Income‑tax Tribunal any defects in the maintenance of the account books have been pointed out nor any evidence has been referred which could contradict the book results of the applicant/assessee. Under these circumstances in our view, there was no justification for rejecting the accounts of the applicant for the year under dispute.
Headnotes / Summary
Income‑tax Act (X1 of 1922)‑‑‑ ‑‑‑‑Ss. 13, proviso & 66(2)‑‑‑Rejection of book results and estimation of sale applying a flat rate of gross profits by Income‑tax Officer‑‑‑Accounts were maintained in a similar manner and the book results disclosed by the assessee were always accepted by the department‑‑‑Book results were rejected on the ground that no regular manufacturing record was maintained by the assessee to co‑relate the same with the production‑‑‑Book results of the assessee, in the past years, were accepted by the department though the assessee had not maintained the manufacturing record and explanation offered by the assessee for drop in the gross profit rate was partially accepted by the Department‑‑‑Neither in the order of the Assistant Appellate Commissioner nor in the order of the Income‑tax Tribunal any defect in the maintenance of the account books had been pointed out nor any evidence had been referred which could contradict the book results of assessee‑‑‑No justification, therefore, existed to reject the accounts of the assessee in circumstances. Sirajul Haq for Applicant.
Judgment & Decree
SAEEDUZAMAN SIDDIQUI, J.‑‑The following question has been referred to us for decision under section 66(2) of the Income‑tax Act, 1922. "Whether on the facts and circumstances of the case, there was any material or evidence on record to justify rejection of book results, estimating the sales and applying a flat rate of gross profit at 20% ?" The facts giving rise to the above reference may be stated as follows:‑‑ In the charge year 1974‑75, the applicant in their return of Income‑tax, declared gross profit at the rate of 18.08% on total receipt of Rs. 50,82,
637. The Assessing Officer, however, did not accept the rate of gross profit and assessed the same at the rate of 21% on the receipt of Rs, 51.00,
000. The applicant filed an appeal against the order of Assessing Officer but his appeal was rejected. His further appeal to the Income‑tax Tribunal also failed. Mr. Sirajul Haq, learned counsel for the applicant contended before us that there was no material or record before the Income‑tax Tribunal to reach the conclusion that the books of account maintained by the applicant were not props or that it was maintained in a manner which made impossible for the Assessing Officer to correctly calculate the real income of the assessee. It is urged by the learned counsel that in the previous years, the accounts were maintained in a similar manner and the book results disclosed by the assesses always accepted by the Department. It would appear from the order of the Tribunal that the book results were rejected on the ground that no regular manufacturing record was maintained by the assesses to co‑relate the same with the production. It is not disputed by the learned counsel for the Department that in the past years in which the book results of .the applicant were accepted no such manufacturing record was maintained by them. In fact from the order of the Appellate Assistant Commissioner of Income‑tax as well as from that of the Income‑tax Tribunal it would appear that the explanation offered by the assessee for drop in the gross profit rate was partially accepted by the Department. In our view neither in the order of the Assistant Appellate Commissioner nor in the order of Income‑tax Tribunal any defects in the maintenance of the account books have been pointed out nor any evidence has been referred which could contradict the book results of the applicant/assessee. Under these circumstances in our view, there was no justification for rejecting the accounts of the applicant for the year under dispute. We accordingly accept this reference and answer the question referred to above in the negative, There will he however, no order as to costs. M.B.A./Z‑117/K Reference answered in negative.