Law: Income Tax Ordinance, 1979

Section: 32,32(3)

Income Tax Ordinance (XXXI of 1979)---S. 32(3)---Rejection of accounts---Estimate of sales---Sufficient material, a prerequisite for estimate---Assessing Officer rejected sales given in return and assessed at higher figure reason being, that assessee did not cooperate at time of assessment and Assessing Officer made his own estimation---First Appellate 'Authority, keeping in view estimate of immediate two preceding years, gave some relief---Held, even after rejection of declared version, Assessing Officer must bring on record sufficient material to support his estimation---Such exercise having not been done, element of guess remained present in the case---Appellate Tribunal restricted the sales accordingly. ORDER The appellant in this case is a private limited company and derives income from manufacture and sale of steel ingots. The sales were returned at Rs.1,05,87,564 and a rate of 6.91 %. The Assessing Officer rejected the declared version estimate sales at Rs.1,30,00,000 and adopted rate of 9% , Learned first appellate authority after findings that in the immediate preceding two years sales were finally determined at Rs 70,00,000 and Rs.1,10,00,000 directed that estimated sales in the year under review should be restricted to Rs.1,33,00,000. The assessee still feels dissatisfied. 2. Parties have been heard. Learned A.R. for the assesses contends that in the earlier years the declared sales were enhanced by the Assessing Officer in the neighbourhood of 5% while in the year under review the estimation evidenced an increase of 25%. Further, contends that for such estimation the…

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