Law: Income Tax Ordinance, 1979

Section: 136(2)

Income Tax Ordinance (XXXI of 1979)---S.136(2)---Reference---Practice and procedure---Question referred pertained to first assessment in respect of trading account of assessee---Question of fact--¬Effect on subsequent assessments---Held, each year was a separate year and was to be assessed in the facts and circumstances of each year---To seek a decision on the question sought to be referred with the purpose to be applicable for future assessment was not warranted for in fact question involved was not question of law but could be termed as question of fact to be determined for future proceedings. JUDGMENT AHMAD SAEED AWAN, J.---This application under section 136(2) of the Income Tax Ordinance has been made by the appellant requiring the Income Tax Appellate Tribunal to refer the following question of law to this Court for answer: "Whether under the facts and circumstances of the case, the finding of this Tribunal regarding application of G.P. rate by the I.T.O. in Manufacturing Account as well as Trading Account is legally sustainable in law?" 2. The brief and material facts are that the assessee is a Private Limited Company and is engaged in the business of manufacturing of Pak. Railways spare parts as well as in the trading of market items, which are also supplied to the Pakistan Railways. During the Assessment year 1977-78 in respect of trading account declared sales at Rs.2,75,394 and gross profit at Rs.35,405. The gross profit works out at the rate of 12.9%; in respect of manufacturing account sales were shown at Rs.9,12,077, gross profit was declared Rs.1,82,400 and G. P. at the rate of 20%. The Income Tax Officer did not accept the declared version; applied G. P. rate on trading account at 15% while on manufacturing account had applied G.P. at the rate of 30% after making some add backs. The appellant/assessee took an application to the Commissioner of Income Tax Appeals; who reduced G. P. rate in the manufacturing account from 30 % to 20 % while rejected the appeal on other accounts. The applicant as well as the Department being aggrieved filed…

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