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Civil Petitions Nos. K‑12 and K‑13 of 1984, decided on 4th July, 1985.
(On appeal from judgment and order of High Court of Sind at Karachi, dated 29‑9‑1983 passed in Income‑tax References Nos. 663 and 664 of 1972).
‑‑‑Art.185(3)‑‑Income‑tax Act (XI of 1922), Ss. 66(2), & S.13, proviso‑ Income‑tax‑‑Assessment‑‑Leave to appeal granted to consider contentions that two questions, referred to High Court under S. 66(2) of Income‑tax Act, 1922 namely (i) whether on facts and in circumstances of case proviso to S. 13 of Income‑tax Act, 1922 could be invoked, and (ii) whether there was any material on record for basis adopted by Tribunal for computing income of respondent, were purely one of fact and no question of law arose in matter for determination by High Court and no interference in matter was, therefore, warranted by High Court in view of concurrent findings of fact recorded by Assessing Officer and Income‑tax Tribunal.
Shaikh Haider, Advocate Supreme Court instructed by Muzaffar Hassan Advocate‑on‑Record for Petitioner.
Nemo for Respondent.
Date of hearing: 4th July, 1985.
The Commissioner of Income‑Tax Central Zone has sought leave to appeal from the judgment of the High Court of Sind, Karachi dated 28‑9‑1983 whereby two questions referred to it under section 66(2) of the Income Tax Act, 1922, were answered in the negative and the reference was decided in favour of the respondent/ assessee.
2. The respondent, which is a private limited company, filed returns of income for the assessment years 1965‑66 and 1966‑67 declaring gross profit at the rates of 18% and 19 respectively. The Income‑Tax Officer found such declared gross profit rate to be low, rejected the book version and worked out profit at the rate of 25 for both the years as according to him, their existed no co‑relationship between the work done and goods supplied.
3. Aggrieved by the orders of assessment passed in respect of the two years under reference the respondent filed appeals before the Income‑Tax Tribunal where, inter alia, rejection of accounts was also challenged. The appeals, however, were dismissed by the learned Tribunal by a consolidated order dated 17‑7‑1972 which led to the filing of two reference applications before the High Court. The following two questions of law were. referred to the High Court for decision;
(1) Whether on the facts and in the circumstances of the case, the proviso to section 13 of the Income‑tax Act could be invoked
(2) Whether there was any material on record for the basis adopted by the learned Tribunal for computing the income of the applicant
The learned High Court as per impugned judgment allowed the references and both the questions were answered in favour of the respondent/ assessee.
4. It was contended by Mr. Shaikh Haider, learned counsel for the petitioner, that the questions referred to the High Court were purely one of fact and no question of law arose in the matter for determination by the learned High Court. No interference in the matter was, therefore, warranted by the High Court in view of concurrent findings of fact recorded by the Assessing Officer and the learned Income‑tax Appellate Tribunal. The learned counsel invited our attention to the findings given by the Assessing Officer as well as the learned Tribunal.
5. The contentions raised above require consideration and leave is accordingly granted.
M. Y. H. Leave granted.
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