| Case ID |
39da7684-57d6-48ad-a473-49468efadba6 |
| Body |
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| Case Number |
Income-tax Case No. 113 of 1972 |
| Decision Date |
Oct 26, 1982 |
| Hearing Date |
Oct 25, 1982 |
| Decision |
The Tribunal's decision to uphold the addition of Rs. 1,25,000 to the declared gross profit for the assessment year 1964-65 was deemed unjustified. The applicant demonstrated that the method of accounting employed was consistent over several years and that the income tax authorities failed to provide adequate grounds for their adjustments. The ruling emphasized that the applicant's production process did not necessitate a stage-wise accounting method. The case highlighted the importance of adhering to established accounting practices and the need for the tax authorities to substantiate their claims with concrete evidence. |
| Summary |
In the case of Income-tax Case No. 113 of 1972, heard by the Sindh High Court, the applicant, MESSRS ROSHAN CLOTH HOUSE, contested the addition of Rs. 1,25,000 to their gross profit as declared for the year 1964-65. The Income Tax Act of 1922 was central to the proceedings, particularly sections 13, 30, and 12. The applicant's argument centered around the consistency of their accounting method, which had not been challenged by the tax authorities in previous years. The court found that the method used was appropriate given the nature of the silk fabric manufacturing process, which involved a single stage of production. The tribunal's previous ruling was criticized for lacking substantiated evidence to justify the addition, leading to the conclusion that the addition was not warranted. This case underscores the significance of established accounting practices in tax assessments and the necessity for tax authorities to provide robust rationale for any deviations from reported figures. |
| Court |
Sindh High Court
|
| Entities Involved |
Income-tax authorities
|
| Judges |
SAEEDUZZAMAN SIDDIQUI,
FAKHRUDDIN H. SHAIKH
|
| Lawyers |
Ali Athar,
Nasrullah Awan
|
| Petitioners |
MESSRS ROSHAN CLOTH HOUSE
|
| Respondents |
COMMISSIONER OF Income tax. (EAST), KARACHI
|
| Citations |
1983 SLD 12,
1983 PTD 63,
(1983) 47 TAX 148
|
| Other Citations |
Not available
|
| Laws Involved |
Income Tax Act, 1922
|
| Sections |
13,
30,
12
|