Law: Income Tax Ordinance, 1979

Section: 22,32(3)

Income Tax Ordinance (XXXI of 1979)---Ss.22 & 32(3)---Income from business---Estimate of sales---G. P. rate--¬Mark-up ---Add-backs---Assessee returned sales with application of his own G. P. rate---Assessing Officer, rejecting the same made estimate of sales on higher rate with 30 % G. P. rate and made addition in P & L Account--¬C.I.T.(A) maintained the same---Assessee, feeling aggrieved, went into second appeal---Appellate Tribunal taking into account its order for the preceding year directed that sales being verifiable be accepted; 30% G.P. rate be adopted as confirmed by Tribunal in the preceding year; mark-up be deleted in the light of observation in the said order of preceding year--¬Add-backs, being unverifiable and unvouched, called for no interference. I.T.A. No.553/LB of 1991-92 and I:T.A. No.1069/LB of 1991-92 ref. ORDER This appeal has been filed by the assessee against the order of the CIT(A) for the assessment year 1991-92. The appellant has agitated the rejection of accounts application of G.P. rate at 30% , estimation of sales and the following add-backs in the profit and loss account. The disallowance of mark-up Rs.111,603 has also been agitated. Claimed Add-back Staff Welfare Rs.4,910 Rs.1,000 Stationery 3,403 1,000 Repair and Maintenance 7,500 3,000 2. The brief facts of the case are that the appellant is a manufacturer of crockery items. Sales were declared at Rs.2,137,850 yielding a G.P. rate of 29,83 % . The assessing officer rejected the declared version as separate. Stock register and Production details were not provided, power and fuel charges had been increased and the wages and benefits were more when compared with the increase in receipts. The assessing officer, therefore, estimated the sales at Rs.40 lac to which G.P. rate at 30% was applied. After making the additions in the profit and loss account the income of the appellant was determined at Rs.128,890 as against loss declared at Rs.194,157. The appellant being aggrieved filed an appeal before the CIT(A) who maintained the treatment accorded by the assessing officer. 3. During the course of the hearing the learned A.R. vehemently urged that the sales have been effected to…

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