ORDER ASHFAQ AHMED, ACCOUNTANT MEMBER.- These CTOSS appeals are directed against the order passed the CIT(A), Faisalabad, dated 22.10.1991 in respect of the assessment year 1990- 91.
The appellant is aggrieved on account of estimate of sales reduced by the CIT(A) and certain add backs made in the profit and loss account expenses whereas the department is aggrieved against the estimate of sales and reduction in the applied gross profit rate.
2. The brief facts of the case are that the assessee is an' individual who derives income from manufacturing and sale of polythene bags. During the year under appeal the assessee had declared sales at Rs. 18,00,000/- yielding gross profit rate at 14.48%. The to for the various reasons recorded in the body of the assessm ent order estimated the sales at Rs. 32,00,000/- and applied a gross profit rate at 25 %.
3. The assessee being aggrieved preferred an appeal before the CIT(A) where he cited a case of M/s. Asghar Plastic in which the appellate authority had reduced the gross profit rate from 25% to 15%. The CIT(A) relying on the above case, reduced the gross profit rate in the case in hand to 15%.
The sales were also reduced to Rs. 27,00,000/-. Certain add backs in respect of telephone,, entertainment and miscellaneous expenses were made by the assessing officer which have been confirmed by the CIT(A).
4. During the course of hearing before us the learned A.R. Of the assessee urged that the estimate of sales as fixed by the learned CIT(A) at Rs. 27,00,000/- was highly excessive as in the parallel case referred to above the receipts were estimated at Rs. 13,00,000/- against the electricity consumption worth Rs. 324,449/- whereas in the assessee case electricity consumption was at Rs.
459,214/-. Therefore, the estimate of sales should have been in proportion to the electricity consumed. However, the learned A.R. Did not contest the add backs made by the assessing officer and subsequently confirmed by the CIT(A) under various heads in the profit and loss account. The learned D.R. On the other hand agitated against the reduction of estimate of sales and stated that the to in the body of his order had cited a consumed and the sales in that case were declared at Rs. 33,63,091/-. Therefore, the estimate of sales as arrived at by the to was contended to be in order and the same did not call for any interference by the CIT(A). The learned D.R. Further urged that the reduction in gross profit rate from 25% to 15% was also arbitrary as the assessing officer had cited as many as five cases in the body of the assessment order wherein gross profit rate ranging between 25% to 40% has been applied. The learned D.R. Further stated that the assessee has a history of application of gross profit rate of 20%.
5. We have considered the arguments put forth by the learned A.R. For the assessee and find no merit in his contention. The reduction in sales by referring to only one solitary case of electricity consumption is not sufficient reason. Furthermore, it is relevant to state that the assessee made sales to the extent of Rs. 17,00,000/- to one group, namely, M/s. Crescent Textile Mills, Sargodha. In this view of the matter, the sales reduced by the CIT(Appeals) to Rs. 27,00,000/- are by no means excessive and the same are accordingly maintained. As stated earlier, the learned A.R. Of the assessee has not pressed the add backs made under various heads of account and the same are accordingly confirmed.
6. As regards the reduction allowed by the CIT(A) in gross profit rate 25% to 15%, we find merit in the contention of the learned D.R. The assessee has a history of application of gross profit rate of 20%.
The gross profit rate of 20% had been applied in the assessee own case in the assessment year 1977-78 against which no appeal had been filed by the assessee, therefore, this rate of 20% has become the history of the assessee. Taking into account all the factors in view and the cases as mentioned by the assessing officer in the body of his assessment order, it would be fair and just if the gross profit rate of 20% is applied in the assessee case. We order accordingly.
7. As a result of the above discussion, the appeal filed by the assessee being devoid of any force is dismissed whereas the departmental appeal succeeds in the manner and to the event as indicated above.