Law: Income Tax Ordinance, 1979

Section:

Income-tax---Application of gross profit rate---History of assessee's case ---Effect---- Rate of gross profit applied in the assessee's case in the previous years against which no appeal had been filed by the assessee became history of the assessee---Application of gross profit rate according to the history of the assessee, therefore, was justified. ORDER ASHFAQ AHMED (ACCOUNTANT MEMBER). ---These cross peals are directed against the order passed the CIT(A), Faisalabad, dated10-1991 in respect of the assessment year 1990-91. The appellant is 2 grieved on account of estimate of sales reduced by the C.I.T.(A) and certain add backs trade in the profit and loss account expenses whereas the department is aggrieved against the estimate of sales and reduction in the 1;1plied 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 I.T.O. for the various reasons recorded in e body of the assessment order estimated the sale at Rs.32,00,000 and Plied 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 C.LT.(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's case electricity consumption was at Rs.459,214. Therefore, the estimate of sales should have been in proportion to the electricity consumed. However,…

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