ORDER SARDAR MUHAMMAD ANWAR A. KHAN, JUDICIAL MEMBER.- These departmental appeals relate to the Assessm ent Years 1987-88 to 1990-91. A combined of the learned CIT (Appeals) Gujranwala dated 29.10.91 has been assailed on the issue of sales and reduction in the and-backs out of the P&L account expenses under different heads.
2. The assessee, a private limited company, continued to derive income during the years under consideration from supply of machinery pans to different Originations from declared and assessed trading results are as under:- 1987- 88 1988-89 1989-90 1990-91 Sales declared 46339/- 1856277/- 2418126/- 2027635/- " assessed 700000/- 2200000/- (Accepted as declared).
GP rate declared 14.76% 14.69% 14.74% 14.90% GP rate applied 15% 15% 15% 15% The assessm ent orders were challenged in appeal. The first Appellate Authority ordered for the acceptance of the declared sales for the Assessment Years 1987-88 and 1988-89 and applied GP rate was found to be in order for all the Assessment Years, partial relief was allowed under different heads of the P&L account to the assessee for all the years under appeal.
3. The department has filed accused appeals on the ground that the relief allowed by the learned first Appellate Authority was un-justified, un-called for and against the facts of the case. The learned DR which arguing the case on behalf of the department submitted that there was no justification for the first Appellate Authority to direct the department to accept the declared sales.
The declared version suffers from serious defects which were not properly explained. The additions made under different heads of P&L account expenses were legal and just as he claimed expenses were not properly vouched and verifiable. On the other hand, the learned AR of the assessee supported the impugned order.
4. From the perusal of the impugned order, it is observed that the first Appellate Authority has discussed the merits of the case at length. The lists of the parties to whom the sales were made included the public and private limited companies. Full particulars of the parties were available.
The declared sales for the Assessm ent Years 1989- 90 and 1990-91 had been accepted by the Department. The assessee was not confronted with any discrepancy through a notice under section 62 of the Income Tax Ordinance or otherwise. Due to these reasons, the declared sales were directed to be accepted. The direction of the CIT (Appeals) on this issue does not call for any interference.
5. The department has also challenged the additions out of the P&L accounts expenses for the Assessm ent Years 1987-88 to 1990-91 which are as under:- Asst. Year Particulars. Claimed Dis-allowed Action ol CIT(Appeals 1987-88 Loading & Forwarding Rs. 4062/- 1500/- 1000/- Misc.
Expenses Rs. 7061/- 3000/- 2000/- '
Entertainment Rs. 1029/- 500/- deleted.
1988-89 Entertainment Rs. 4530/- 2000/- 3000/- Advertisement Rs. 18250/- 4000/- 1000/- Misc, expenses Rs. 3183/- 1500/- 1000/- Loading & Fording Rs. 14625/- 4000/- 2000/- 1989-90 Travelling. Rs. 33,770/- 16000/- 8000/- Entertainment Rs. 8,207/- 5000/- 2000/- Loading & For- Rs. 21,990/- 8347/- 6000/- 1990-91 Loading Forwarding Rs. 19,253/- 10,000/- 5000/- Advertisement. Rs. 5,064/- 4,000/- 1000/- Misc, expenses. Rs. 5,337/- 4,000/- 1000/- Printing & Stationary. Rs. 2,540/- 4,000/- Deleted.
The additions have been made by the to for un-vouched and un-detailed and unverifiable reasons. In appeal the learned CIT (Appeals) have reduced deleted the additions considering the volume of business of the assessee and excessive nature of the expenses. The learned DR could not point out any defect in the impugned order regarding the additions made out of the P & L account expenses for all the Assessm ent Years under consideration. His action is confirmed.
6. As a result of the above discussion all the four departmental appeals are dismissed being devoid of any merit.