1995 PLP (Trib (PTD)

Rs.5, 37,011 G.P. Rate 16.97% 15.64% The above trading account for the assessment year 1992-93 reflects only a part of transaction of the assessee because the assessee in this case has purchased goods locally as well as has imported the goods. On the imported goods the assessee has paid tax under section 80-C, hence, sales relating to imports are not reflected in the above trading account. The I.T.O. did not accept the trading results on the ground that sales made by the assessee were not verifiable. The I.T.O. also observed that purchases of the assessee are also unverifiable. Hence, he estimated the sales at Rs.10,00,000 and applied G.P. rate at 18%. The I.T:O also made additions out of profit and loss account expenses and worked out the income at Rs.31,162 to which I.T.O. added the presumptive income at Rs.12,

196. This total income was worked out by the I.T.O. at Rs.43,358.

3. Aggrieved by this treatment the assessee went in appeal and agitated before the learned CIT(A) excessiveness of estimate of sales, G.P. rate and disallowance out of profit and loss account expenses. The assessee also agitated that ITO was not justified in adding presumptive income under section 80-C to the other income of the assessee. The learned CIT(A) rejected the appeal of the assessee except disallowances out of profit and loss account expenses which were reduced to 53% of Rs.23,310.

4. The assessee still feels aggrieved and has agitated excessiveness of sales and inclusion of presumptive income into the assessee's other income.

5. Mr. Anwar Mehdi, the learned counsel of the assessee has contended that estimate of sales made by the I.T.O. was excessive, unjustified and arbitrary because in this case the assessee has made local purchases only from one party i.e. M/s. Saad Impex. Hence, purchases of the assessee are entirely verifiable. As far as the sales are concerned the learned counsel contended that sales were made to known parties in each city and town, hence, these are also verifiable. The learned counsel of the assessee also argued that G.P. rate applied was excessive but this issue has not been agitated in grounds of appeal hence, the contention of learned counsel of the assessee regarding G.P. rate is not accepted. The learned D.R. vehemently challenged the contention of the assessee's counsel that sales are verifiable. He pointed out that sales are predominately unverifiable because complete addresses of the persons to whom sales were made are not available and some of the examples have also been given by the I.T.O. in the assessment order. The learned D.R. pointed that in the list of sales provided by the assessee sales to miscellaneous clients have been indicated at Rs.59,524 which indicates clearly unverifiable sales.

7. I have carefully considered the facts of the case and arguments advanced from both the sides. The estimate of sales made by the I.T.O. is excessive which is reduced to Rs.8,50,000.

8. The last issue which remains to be decided is whether I.T.O. was justified in adding presumptive income to the other income of the assessee or not? The learned CIT(A) dispelled the contention of the assessee with the following observations:

"Meanwhile the contentions raised during hearing of appeal on assessment being framed both under sections 62 and 80-C being anomalous are rejected as incompetent as there is nothing in law or in circulars on simultaneous action on both accounts where a tax payer earns income chargeable under section 22 as well as presumptive income."

9. The learned counsel of the assessee has contended that under section 80-C if the assessee imports any goods he is required to pay tax at import stage and section 80-C provides that tax paid by assessee in the above manner will constitute his final liability of tax. Hence, the income accruing to the assessee under section 80-C could not be taxed again. The learned D.R. defended the orders of the authorities below. However, I agree with the arguments of the learned counsel of the assessee. Under section 80-C tax paid by the assessee at import stage constitute a final liability and no further tax is required to be paid by such an assessee. In cases of persons who do not have any other income except from sale of imported goods such persons are not even required to file any Income Tax Return. This, matter has been further illustrated by the Central Board of Revenue vide Circular No. 12 of 1991, dated 30-6-1991.

10. Because of these reasons the presumptive income added by the I.T.O. into income computed under the normal law is hereby deleted.

11. The appeal of the assessee succeeds as above, M.BA./107/T Order accordingly.