Law: Income Tax Ordinance, 1979

Section: 136

Income Tax Ordinance (XXXI of 1979)---S.136(1)---Reference---Gross rate of profit---Applicability---Principle of consistency---Assessee was a retail departmental store dealing in innumerable goods---Income Tax Appellate Tribunal had accepted declared gross profit of assessee although it was not maintaining quantitative analysis, on the ground that it was not possible to maintain record of quantities bought and sold by a retail stores dealing in innumerable goods---In previous two assessments of the assessee, gross profit was accepted and authorities did not file any reference before High Court---Validity---Reasons assigned by Income Tax Appellate Tribunal were unexceptionable and in view of non-filing of reference applications against the order for previous years, the department had accepted order of the Tribunal---High Court keeping in view the previous history of the case of assessee, answered the question referred in affirmative---Reference was accepted in circumstances. ORDER Through this reference application under section 136(1) of the Income Tax Ordinance, 1979, the Income Tax Appellate Tribunal, Karachi has referred following question of law for the opinion of this Court, which relates to the case of the respondent for the assessment year 1986-87:--- Whether on the facts and circumstances of the case the ITAT was justified in accepting declared gross profit when quantitative record of buying and selling transactions was admittedly not maintained by the assessee and sales were made through an NCR machine which did not have sealed memory system. Relevant facts reproduced from the order of the Tribunal dated 8-2-1990, read as under:-- The assessee is running a self-service market at Clifton dealing in a variety of goods like grocery, medicines, crockery, ice cream, etc. Gross Profit @ 12.5% was declared on sales amounting to Rs.54.96,320 for the accounting year relevant to assessment year 1986-87. The I.T.O. rejected the declared gross profit by holding that quantitative analysis of buying and selling transaction has not been maintained and the NCR cash registered through which cash memos are issued to the customers, does not have sealed memory system. Due…

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