Law: Income Tax Ordinance, 1979

Section: 22,148,13(1)(a)

(a) Income Tax Ordinance (XXXI of 1979)----S.22---Income from business---Estimate of sales---Assessee returned sales---Assessing Officer, discharging trading results, estimated sales on his own with high G.P. rate ---C.I.T. (Appeal) confirmed same---Validity--¬Held, Commissioner of Income Tax (Appeal) erred in ignoring fact that in case cited by assessee, G. P. rate was estimated on sale of scraps from two self-imported scrap vessels and Assessing Officer failed to distinguish facts of two cases---Confirmation of G.P. rate and estimate of sales, therefore, were unsustainable---Both G. P. rate and sales were ordered to be deleted. (b) Income Tax Ordinance (XXXI of 1979)--- ----S.148---Credit entries---Onus of proof---Credit entries were found in assessee's books of account in the name of other persons ---Assessee was confronted ---Assessee pleaded that creditors had admitted giving loans--- Assessing Officer doubted creditworthiness of auditors---Addition under S.13(1)(a), Income Tax Ordinance, 1979 was made ---C.I.T.(A) upheld addition on the ground that onus to prove genuineness of cash credit squarely rested on assessee who had failed to discharge---Held, assessee satisfactorily identified creditors who had admitted having advanced amounts credited to their accounts in assessee's books and Assessing Officer failed to discharge his onus to record any materials in his possession to prove that assessee's case could not be accepted and entries still represented income of assessee from suppressed source---Assessing Officer also failed to pursue equity to its logical end ---Assessee thus, had sufficiently discharged his onus to explain source of credit income---Assessing Officer having failed to discharge his onus and C.I.T. (A) had also failed to weigh properly burden of proof, addition was ordered to be deleted. NTN 12-06-3253281; Sarogi Credit Corporation v. CIT, Behar (1976) 103 ITR 344; Anraj Nasim Das Punjab (1951) 29 ITR 562 and Shankar Inds. v. C.I.T., Calcutta (1978) 114 ITR 689 ref. ORDER S.M. SIBTAIN (ACCOUNTANT MEMBER).---The appellant, an A.O.P., engaged in ship breaking has preferred this appeal against the order of the learned CIT (A) Out of various…

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