ORDER IFTIKHAR AHMAD BAJWA, ACCOUNTANT, MEMBER.- Appellate registered from deriving income from manufacture and sale of owner Presses is contesting CIT(Appeals's) order dated 27.5.1992 rejecting to assessm ent year 1988-89.
2. For the year under appeal income had been disclosed at Rs. 33.167/- Originally assessment was made on an income of Rs. 4.15.88 which was ultimately set aside by the Tribunal with specific directions for verification of the declared sales/supplies which were claimed to have been made to verifiable parties and also for re-examination of income from repairs. In the order u/S. 62/135, against the declared sales of Rs. 6,49,304/- sales have been estimated at Rs. 12,00,000/- as against Rs. 15,00,000/- in the original assessment and P & L add backs amounting to Rs. 40,200/- as per original assessm ent have been repeated. The CIT(Appeals)upheld the estimate of sales but reduced P & L add back from Rs. 40.200/-. Appellant has raised objection against estimate of sales as well as the P & L add backs.
3. So far as the question of P & L add backs is concerned, this issue was unnecessarily taken up by the revenue authority as the Tribunal vide its order in I.T.A. No. 187/LB/1990-91 dated 15.1.1991 had remanded the order to the to for verification of sales/supplies and income from repairs only. Thus the treatment meted out by the CIT(Appeals) against the original assessment stood confirmed.
The to will accordingly about the P & L add backs as confirmed in the order of the first appellate authority in appeal against the original assessment.
4. So far as the -sales are concerned, appellant had furnished complete details or total sales amounting to Rs. 6,49,304/-. The to issued notices to the 11 parties to whom the sales had been made and sub-sequently informed the assessee that notice to M/s. Star Oil & General Mills Sakkhar had been returned undelivered whereas no response had been made by M/s. Ulbricnts Pakistan Ltd. Karachi, M/s. Azma Ghee Mills Ltd., Kabirwala and M/s. Delite Industries Gulbergh, Lahore. In respondent to FTO's letter dated 15.12.1991 appellant vide its letter dated 21.12.1001 furnished a copy of reply by M/s. Ulbrichts Pakistan Ltd. Karachi and also a certificate from M/s. Control Company wherein sales as shown by the appellant company were confirmed. Appellant also intimated that confirmation from the other two parties would be provided as noon as available. In the order offreassm ent the to has not mentioned the results of his verification and after mentioning the absence of accounts and back statement, estimated the sales at Rs. 12,0, 000/- as had been done by the CIT(Appeals) while disposing of the appeal is respect of original assessment with the following observations:- "The assessee specifically contended before the learned Tribunal that all the transactions were made through cheques. But as per list of customers produced by the assessee fifty per cent of the parties were not admittedly made payments through cheques. The customers who made payments in cash are as under:-
1. Allied Packages, 2249 Nishatabad Road, Multan. Rs. 20,000/-
2. Allied Packages, 2249 Nishatabad Road, Multan. Rs. 30,000/-
3. State Bank of Pakistan, Shahrah-e-Qauid-e-Azam, Lahore Rs. 9.025/-
4.
1. Allied Packages, 2249 Nishatabad Road, Multan. Rs. 350,000/-
5. State Bank of Pakistan, Lahore Rs. 42,350/-
6. Uni Tech, Green Town, 23, Ahmad Street, Lahore Rs. 6,250/-
7. M.BI. Industrial A 51 site, Karachi. Rs. 20,000/-
8. Azmat Ghee Mills Limited. Kabir Wala \Rs. 50.000/- The assessee has also not been able to explain the decrease in declared versions as observed in the original assessm ent order dated 26.10.1989 in spite of the fact there was not decrease in the availability of capital as compared to the earlier years. Moreover most of the customers to whom sales were statedly made did not may any reply to the notices issued by this office and thus the sales remained mostly unverifiable. It is also important to point out that the business place of the assessee is situated in a market which is well known all over Punjab for the sale of such goods as which the assessee deals. The declared version under all the bead in fact are not believable at all.
It is grossly understand in view of the past history. Taking into consideration all those facts the sales fixed by the learned CIT(A) are assessed accordingly."
The cited is the assessm ent order cannot possibly justify rejection of the declared sales as the 8 parties mentioned by the to are Government Organizations or Limited Companies. The assert that sales were unverifiable as most of the customers did not make any reply is contrary tot he facts on record as most of the customers did acknowledge the sanctions and the parties unquestionable were verifiable. 3 of far as the history is concerned, the Tribunal had specifically taken note of the fact that during this year the sales were claimed to have been made to Government Organizations and Industries and the position for this year was distinguishable from the past. ITO's assumption that capital and other circumstances being the same, decrees in tum over was not understandable was misplaced as the business had declined to such an extent that it had statedly come to a complete stand still at the ed of this year. Thus the facts on record did not justify rejection of the declared sales and estimate of the same at Rs. 12,00,000/-. The declared sales would accordingly be accepted and assessment modified accordingly.
5. The appeal succeeds as above.