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P. T. R. No. 61 of 1985, decided on 7th October, 1985.

---S 136‑Income‑tax reference‑All questions formulated by assessee/petitioners relating to determination of matters of fact and no question of law arising for decision by High Court‑Order of tribunal impugned in petition based on appreciation of evidence arid supported by acceptable reasons‑Reference dismissed.

‑‑‑ S. 136‑Reference‑Assessment‑Declared version of assessee rejected for reason that accounts maintained by assessee were not satisfactory‑order of rejection supported by fact that neither accounts had been audited nor entries were vouched or verified- Order of rejection therefore was justified‑Since each assessment year has to be taken up separately, fact that in past, declared versions had been accepted by Department without questioning, hell, would not furnish a ground for assessee's assertion that his declared version be also accepted in respect of year under consideration.

‑‑‑ S. 136‑Reference‑Contention of assessee that before relying upon parallel cases Tribunal did not give any opportunity to him to show that those cases had no bearing upon case‑Parallel cases cited at liar and assessee not asking for an opportunity to dispute their applicability to its own case ‑‑la absence of any opportunity being sought in this regard, contention, held, was entirely irrelevant.

M. Saleem Chaudhary for Petitioner.

Date of hearing: 7th October, 1985.

.‑These are six petitions, registered as P. T. R. Nos. 61, 64, b5, 66, 67 and 69, all of 1985, under section 136(2) of the Income‑tax Ordinance, 1979. These have been preferred by the same assessee and relate to different assessment years, beginning from 1973‑74 and ending with 1978‑79.

2. The assessee is a private limited company and is engaged in con struction business. In the course of its business it has obtained construc tion contracts from various Government departments. It has opened a number of branches located in different parts of the country. These peti tions relate entirely to its income at the head office.

3. The Income‑tax Officer rejected the declared versions in respect of all the assessment years under consideration for the reasons that the accounts of the assessee were in an unsatisfactory state. After rejecting the declared versions the Income‑tax Officer made the declared receipts as the basis and then applied a gross profit rate of 17.5% to compute the income. The assessee was dis‑satisfied with the treatment given to him by the Income‑tax Officer and preferred appeals before the Appellate Assistant Commissioner. The Appellate Assistant Commissioner also did not accept the declared versions and applied the same basis for discover ing the income of the assessee during the years under consideration but reduced the gross profit rate to 15 %. From the order of the Appellate Assistant Commissioner, both the assessee as well as the department pre ferred appeals before the Appellate Tribunal. The Appellate Tribunal upheld the order of rejection of accounts but enhanced the gross profit rate to 17.5 % as determined by the Income‑tax Officer. The assessee then moved the Tribunal to make a reference to this Court but his prayer was turned down The assessee has now come to the High Court and has formulated the following three questions for decision of this Court. These questions are: ‑

(1) Whether on the facts and in the circumstances of the case there was any legal justification for the rejection of the account version of the applicant Company in the Head Office Trading Account. When the appellant in the similar circumstances had the history of the acceptance of the declared version.

(2) Whether in the assessment years under consideration i.e. 1973‑74 to 1978‑79 the learned Tribunal in the absence of any new element/ feature was legally justified to depart from the past history of the appellant as to the acceptance of the disclosed gross profit rate particularly when the returned rate was considered extremely good by the Appellate Assistant Commissioner 'B' Range, Rawalpindi in his order dated 19‑5‑1980 and the Appellate Tribunal itself did not consider the same too low.

(3) Whether the learned Tribunal was at all justified in law to rely upon the results in other cases cited before it for the first time by the department without confronting the appellant with the same and allowing any opportunity to the appellant to show that the aforesaid cases had no bearing upon the cases under consideration.

4. After going through the record we are of the opinion that all the three questions formulated by the assessee relate to the determination of matters of fact and that no question of law arises for our decision. As stated earlier, the declared reasons have been rejected for the reason that the accounts maintained by the assessee were not satisfactory. In support of this finding it has been pointed out that they have not been audited and the entries are neither vouched nor verifiable. These being the obser vations with regard to the account it cannot be said that there was no' legal justification for their rejection. Since each assessment year has to taken up separately the fact that in the past the declared versions ha been accepted by the department without questioning, would not furnish a ground for the assessee's assertion that his declared versions be also accepted in respect of the years under consideration. Thus, question No. (i) does not raise any legal proposition requiring a decision of this Court.

5. For adopting the gross profit rate of 17.5 % the Appellate Tribunal gave substantial reasons. It compared the performance of different assessees engaged in the same line of business and found that their rate of gross profit varied between 15 % to 18 %. It also noticed that the assessee enjoyed many advantages not available to others, which should enhance it margin of profit. These advantages were: ‑‑

(i) the assessee had its own brick kiln froth which bricks were supplied on cost basis for its construction business.

(ii) it has its own machinery and transport, and

(iii) it employed permanent staff.

The Tribunal further thought that the gross profits rates accepted by the department for the earlier assessment years, namely, 1971‑72 and 1972‑73 were not relevant as abnormal conditions prevailed in the country during those years. It will thus be seen that the Tribunal has based the adoption of gross profit of 17.5 % on appreciation of the evidence before it and has given acceptable reasons in support thereof. Thus question No. (ii), too which in essence challenges the rate of gross profit adopted by the Tribunal do not necessitate any decision on a question of law.

6. Question No. (iii) relates to the grievance of the assessee that before relying upon parallel cases the Tribunal did not give any opport unity to it to show that those cases had no hearing upon its case. It seems difficult to accept this contention. The parallel cases were cited at the bar and it does not appear that the assessee had ever asked for an opportunity to dispute their applicability to its own case. In the absence of any opportunity of being sought in this regard question No. (iii) becomes entirely irrelevant.

7. For the reasons stated above these petitions are dismissed.

M. Y. H Petitions dismissed.

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