1. ORDER SARFRAZ AHMAD, ACCOUNTANT MEMBER. - These appeals by the assessee/appellant are directed against the orders of the AAC Renge-III, Lahore for the Assessment Years 1990-91 dated 10- 10-91, and Appellate Additional Commissioner of Income Tax, Appeal Range Lahore for the Assessm ent Year 1991-92 dated 25-1- 95 and for the Assessment Year 1993-94 dated 13-1-95.
2. The brief facts of the case are that the appellant an individual, statedly derives salary income from M/s. Jasco (Pvt.) Ltd. As well as business income on sale of garments and overall. The position of the declared and assessed incomes is as under: Assessm ent Years Income declared Income assessed 1990-91 Rs. 40,000 Rs. 135,180 1991-92 Rs. 83.000 Rs. 153, 500 1993-94 Rs. 88.000 Rs. 190,360 Assessm ent Year 1990-91 Sales declared Rs. 6.00,000 Sales Estimated by the to (i) Garments Rs.
3. 5,75,000 (ii) overalls Rs. 1,75,000 G.P. Declared 14.5% G.P. Rate applied by to (i) Garments 15% (ii)
4. Overalls 25% Reduced by A AC to 20% Assessm ent Year 1991-92 Sales Declared Rs. 5.93,100 with G.P. Rate 14.%. 5 Estimated (garments) Rs.6,50,000 with G.P. Rate 15% Confirmed By to (Overalls) Rs. 2,25,000 with G.P. Rate 20%-do- Assessm ent Year 1993-94 Sales Declared Rs. 7,13.600 with G.P rate 15% Estimated by to (i) Garments Overalls - Treatment by A AC Rs. 9,00,000 with G.P. Rate 15% Rs. 3,00,000 with G.P. Rate 20% Sale of garments reduced to Rs. 8,50,000 with G.P. Rate 15% G.P. Rate reduced to 15%, under the head Sale of Overalls.
5. The main point agitated by the appellant in all the years is regarding the estimate of sales made by the Assessing Officers after bifurcating them under the bead Garments and Overalls and the G.P. Rate applied and confirmed in the Assessment Years 1990-91 and 1991-92 by the Appellate Authority. The disallowances made out of the expenses claimed to have been agitated in the Assessm ent Year 1990-91. It is vehemently contended by the AR that no stitching business is done by the assessee/appellant himself and only read-made stitched garments are bought as such for sale. Therefore, there was no justification on the part of the Assessing Officer to bifurcation the sales under two heads i.e. Garments and Overalls and apply a different G.P. Rate which has been separately confirmed by the Appellate Authorities in the first two years. It is also contended that the business of the appellant was on a small scale with every little capital assessments made by the Assessing Officers by estimating the sales bifurcated under two different heads was not fair.
6. The learned DR on the other hand maintains the estimates made as well as the G.P. Rate applied both by the Assessing Officer as well as the Appellate Authorities to be fair.
7. We have gone through the orders of the officers below and have also perused the records of the case. On the facts obtaining, we do not find any justification with the department to bifurcate the sales under two different heads and apply separate G.P. Rates on the estimates so made. Even the Appellate Authorities failed to appreciate that the assessee/appellant does so additional work by himself at all, as such, to estimate the sales under different heads and apply separate G.P. Rates, was not proper. On the facts obtaining we feel that there was no reason with the Assessing Officer to estimate the sales under different heads and apply separate G.P. Rates as well as with the Appellate Authorities to maintain the bifurcation made and apply different G.P. Rates. In the circumstances, we feel that for the Assessment Year 1990-91 the combined sales should be estimated at Rs. 6,75,000 both the respect of Garments and Overalls on which a combined G.P. The sales are directed to be adopted both in respect of Garments and Overalls at Rs. 6,75,000 on which a combined G.P rate of 15% should be applied. While for the Assessment Year 1993-94 the combined sales are directed to be adopted at Rs. 8,00,000 on which a combined G.P. Rate of 15% as declared be accepted.
8. The additions made out of the profit & loss account expenses being fair are confirmed for the Assessm ent Year 1990-91.
9. The three appeals filed at the instance of the assessee/appellant succeed to the extent and in the manner as indicated above.