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Income-tax Reference No.26 of 1976, decided on 4th September, 1.985
---S. 66(2)--Reference--Order of Tribunal based on appreciation of facts--No question of law, held, arose out of such an order.
Commissioner of Income-tax Central Zone. Karachi v. Karachi Oil and. Seed Industries Ltd., Karachi 1985 P T D 70 applied.
A.A. Dareshani for Applicant.
Iqbal Naeem for Respondent.
Date of hearing: 4th September, 1985.
.--This Income-tax Reference under section 66(2) of the income-tax Act, 1922 (hereinafter called the Act) is by the Commissioner of Income-tax (Central Zone), Karachi, whereby the following question of law said to arise out of the order dated 17-12-1974, passed by the Income-tax Appellate Tribunal, Karachi, is referred to this Court for answer economy
"Whether, on the facts and in the circumstances of the case, the Tribunal was justified in reducing the estimated income from business and property by a flat rate of 50 per cent of the earlier years estimates."
2. The reference relates to the assessment year 1971-72. For this year while making the assessment the Income-tax Officer estimated the income of the assessee from business and property of the assessee in East Pakistan at Rs.7,41.366 and 89,665 respectively in the absence of accounts.
3. Aggrieved by the order of assessment the respondent filed an appeal with the Income-tax Appellate Tribunal and the Tribunal reduced the estimate of income to a flat rate of 50 per cent of the earlier year's assessment. In doing so the Tribunal took note of the disturbed conditions prevailing in East Pakistan in year which is the year Fall of Dacca as follows:-
"The last objection relating to the year 1971-72 concerns the estimates of business and property income from East Pakista6 at Rs.7,41,366 and Rs.89,665 respectively. The Appellant, for admitted difficulties could not produce accounts from East Pakistan branches with the result that the Income-tax Officer pitched up these estimates on the basis of the immediately preceding years. The appellant's contentions before us are that the accounts could not be produced as these were left over in East Pakistan the production thereof was beyond the appellant's control, Moreover due to disturbed conditions the appellant could not earn the same profits as he had earned in the earlier years. Therefore, the Income-tax Officer should not have taxed any income from East Pakistan. We, however, find that-while we cannot accept the appellants contentions in entirety there is certainly some force in what the appellant contends and, having regards to the disturbed conditions we would direct that only 50% of the earlier years estimates may be adopted, for this year as the appellant's East Pakistan income both from business and property."
4. Thereafter, the applicant filed an application under section 66(1) of the Act with the Tribunal requesting the Tribunal to refer the question for decision of the Court which the Tribunal declined holding as follows:-
"The learned counsel of the assessee-respondent contends that the Tribunal's decision is based on an overall appraisal of the entire factual situation prevalent in East Pakistan and an excessive guess work of the Income-tax Officer was simply made reasonable by the Tribunal's own estimate, in the prevailing circumstances. No interpretation" of law, in any manner, is involved in this guesswork. Therefore, the question raised by the learned Commissioner of Income-tax for the year 1971-72 does not arise as a question of law from the order of the Tribunal. It is purely a finding of fact and we would accordingly refuse to refer this question either."
5. We agree with the Tribunal that no question of .law arises out of, their order for the same is based on appreciation of facts, conditions prevailing in the relevant year in East Pakistan, which was the year of Fall of Dacca. '
6. In Commissioner of Income-tax Central Zone Karachi v. Karachi Oil and Seed Industries Ltd., Karachi 1985 P- T D 70 in which the question raised was in the following terms. We held far the detailed reasons given therein that the question raised was not the question of law and, therefore, we rejected the application made by the Commissioner of Income-tax (Central Zone), Karachi.
"Whether on the facts and in the circumstances of the case, the Income-tax Appellate Tribunal was justified in reducing the disallowance of loss to the extent of Rs.50,000 while holding that the accounts were rightly rejected by the Income-tax Officer "
It is agreed those reasons would also apply to this case. We, therefore, hold that no question of law 'arises out of the order of the Tribunal and accordingly reject the application.
M.B.A./C-18/K Application rejected.
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