Law: Income Tax Ordinance, 1979

Section: 32(3)

(a) Income Tax Ordinance (XXXI of 1979)----S.32(3)---Rejection of accounts ---Addition---Assessee, a dealer of a State¬-owned oil company---Mere pointing out that the sales are unverifiable would not warrant rejection of accounts, for the sale price in such cases is fixed by the principal company and unless the department proves that the assessee had indulged in black marketing, no addition is sustainable in law. (b) Income-tax- ----Rejection of accounts---Addition---Commission received by assessee--¬Assessee, a dealer of a State-owned oil company---Mere pointing out that the sales are unverifiable would not warrant rejection of accounts, for the sale price in such cases is fixed by the principal company and unless the department proved that the assessee had indulged in black marketing, no addition was sustainable in law. ORDER ASHFAQ AHMED (ACCOUNTANT MEMBER).---These are, three appeals in all. The department and the assessee are in cross=appeals for the assessment year 1990-91 against the order passed by the C.I.T.(A), Zone-I, Faisalabad, dated 9-8-1992. The third appeal has been filed by the department against the order of the C.I.T.(A), Zone-III, Faisalabad, dated 21-10-1991 for the assessment year 1989-90. 2. For the assessment year 1989-90 the department is aggrieved on account of deletion of additions made under the heads Kerosene/LDO account of Lubricants account. For the assessment year 1990-91 the department is aggrieved on account of deletion of addition made under the head commission on sale account and deletion of addition in miscellaneous income whereas the assessee is only aggrieved on account of the treatment meted out by the C.I.T.(A) under the head tank lorry account. 3. Assessment year 1989-90. The assessee is a registered firm which derived income from sale of petroleum products as dealer of M/s. Pakistan State Oil. For the year under consideration the I.T.O. had made round additions of Rs.25,000 and Rs.30,000 under the heads Kerosene and Lubricants account. The assessee being aggrieved preferred an appeal before the C.I.T.(A) who deleted the additions under both the parties the ground that these additions have been made without any solid…

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