Abdul Hamid Chowdhury and others (Applicants)
Commissioner of Taxes (Respondent)
High Court Division
(Special Original Jurisdiction)
Syed Amirul Islam J
AKM Shafiuddin J
May 29, 2000.
Khandker Faziur Quadir—For the Applicants.
Dabiruddin Ahmed, Deputy Attorney General—For the Respondent.
Reference Application Nos. 31 and 32 of 1998.
Syed Amirul Islam J. – As common question of facts and law are involved in these two reference applications and the parties being same they are heard together and being disposed of by this judgment.
2. The Reference Application No. 31 of 1998 relates to the assessment year 1992-93 whereas the Reference Application No. 32 of 1998 relates to the assessment years 1993-94. In these two reference applications only the figure in respect of professional income, house property income and family expenses differ but the reasons assigned for arriving at these figures are similar. The professional income for the assessment year 1992-93 has been determined at Taka 1,75,000.00 whereas for the next assessment year it has been determined at Taka 1,90,000.00. Similarly, family expenses was estimated at Taka 2,50,000.00 in the assessment year 1990-91 and at Taka 2,60,000.00 in the assessment year 1993-94.
3. The original applicant was Abdul Hamid Chowdhury who died intestate on 23-8-98 and vide order dated 10-11-98 his heirs have been brought on record by Substitution in place of deceased applicant.
4. These reference applications arise out of Judgment and order dated 5-1-98 passed in ITA No. 643 of 1995-96 (Assessment year 1992-93) and ITA No. 644 of 1995-96 (Assessment year 1993-94) by the Taxes Appellate Tribunal, Division Bench-1, Dhaka.
5. The original assessee-applicant submitted income tax return for the assessment year 1992-93 showing a total income of Taka 93,916.00 but in assessing the total income of the assessee applicant the DCT estimated gross income from profession at Taka 3,00,000.00 and deducted expenses of an amount of Taka 1,25,000.00 and thus computed net income from profession at Taka 1,75,000.00 as against disclosed gross income at Taka 48,000.00. The DCT also estimated family expenditure at Taka 50,000.00 against Taka 1,00,000.00 shown by the petitioner.
6. For the assessment year 1993-94 the assessee submitted income tax return showing a total income of Taka 86,416.00. But DCT assessed the total inc at Taka 2,72,176.00. The OCT amongst others estimated gross income from profession at Taka 3,20,000.00 and deducted expenses at Taka 1,30,000.00 and computed net income from profession at Taka 1,90,000.00 but the petitioner disclosed gross income a Taka 60,000.00. expenses at Taka 49,866.00 and net income at Taka 10,134.00.
The DCT also estimated family expenses at Taka 2,60,000.00 against Taka 1,00,000.00 shown by the applicant.
7. Against the aforesaid orders of assessment the petitioner preferred appeals before the Joint Appellate Commissioner of Taxes. Range-3, Zone who confirmed the estimation of professional income and family expenses vide his order dated 11-6-95. Being aggrieved by the said appellate order the petitioner moved the Appellate Tribunal by way of second appeals and the Tribunal after hearing the parties affirmed the orders of AJCT and that order of affirmation is under challenge in these reference applications.
8. Mr. Khandker Fazlul Quadir, the learned Advocate appearing for the assessee-petitioner submits that the Deputy Commissioner of Taxes without any legal basis estimated the net professional income of the assessee at Taka 1,75,000.00 and Taka 1,90,000.00 respectively and that estimation of the professional income has been affirmed by the AJCT and that order was confirmed by the Tribunal without any basis inasmuch as the AJCT passed the first appellate order without considering the merits of the order of the DCT who made the order on hypothesis, conjecture and surmise. The learned Advocate further submits that the Tribunal erred in law in not considering the fact that the DCT estimated the professional income on the basis of past record but estimated the income higher than the previous year baselessly and committed the same mistake in case of family expenses.
9. Mr. Dabiruddin Ahmed, the learned Deputy Attorney-General appearing for the respondent, on the contrary submits that in the instant Case the assessee did not maintain any books of account and, as such, the DCT was compelled to estimate the professional income of the assessee applicant on estimation, and in estimating the same the DCT has disclosed a basis for arriving at such a figure. The learned Deputy Attorney-General further submits that in assessing the family expenses after rejecting the version of the assessee the DCT furnished same material basis in arriving at the figure and taking into consideration that aspect of the case both the AJCT and the Tribunal confirmed the said estimation and in doing so they had not out stepped their authority.
10. Perused the impugned order and the order of the DCT and AJCT in question. On a perusal of the application and the papers annexed herewith it appears that the DCT resorted to estimate the professional income of the assessee in the absence of maintenance of any books of accounts and estimated the gross professional income at Taka 3,00,000.00 and Taka 3,20,000.00 and after deduction of allowable expenses estimated net professional income at Taka 1,75,000.00 and at Taka 1,90,000.00 respectively, In arriving at that figure the DCT has relied on the past record of the assessee. It appears that in the previous assessment year the professional income was assessed at Taka 1,45,000.00 only and the DCT did not in particular assign any reason why that figure in the current year has been enhanced from Taka 1,45,000.00 to Taka 1,75,000.00 and then at Taka 1,90,000.00 for the next year. In the course of argument the learned DAG faintly made an attempt to support the estimation on the ground that by the lapse of the time the cost of living has gone up but the order of the DCT does not refer to that. It is pertinent to note that the DCT in estimating the professional income relied on the past record of the assessee but for reasons best known to him he has failed to assign any reason which prompted him to increase the professional income from Taka 1,45,000.00 to Taka 1,75,000.00 and Taka 1,90,000.00 respectively and this aspect of the Case has been totally ignored both by the AJCT and the Tribunal.
11. Now it brings us to the estimation of family expenses. On a perusal of the assessment order it appears that the DCT has referred to certain materials in estimating the family expenses. The figures of family expenses have been affirmed by the AJCT and in affirming the family expenses he also took due note of the number of the family members, telephone expenses, maintenance of ground and payment of wages to the night guards and thus found that the estimation made by the DCT was right and verifiable. The Appellate Tribunal however affirmed the family expenses without assigning any reason whatsoever but by simply making an observation that examination of the record justifies the estimation made by the DCT. In this connection it may be pointed out that the family expenses of the assessee for the previous year i.e. assessment year 1989-90 was shown at Taka 1,00,000.00 only and that was accepted by the DCT without any question but for the assessment years in question that figure has been enhanced from Taka one lac to Taka 2,50,000.00 and Taka 2,60,000.00 but it appears to us that no reasonable basis has been furnished by the Assessing Officer for such figure in the family expenses. There is nothing on record to show on what basis he has enhanced the family expenses although it appears that in making the assessment he consulted the f past record of the assessee but enhancement of the amount to such an extent does not appear to be in line with previous record and this aspect of the case was also ignored by both the AJCT and the Appellate Tribunal. It is not the case of the department that in these years the assessee spent fabulous amount or incurred new family expenses. In that view of the matter we fail to understand on what basis the figure was raised by the DCT and on what material evidence. In consideration of these facts and circumstances of the Case it appears that the Tribunal, in fact, without any basis whatsoever affirmed the estimate of the professional income as well as the family expenses of the assessee applicant.
Accordingly, we answer both the questions in the negative and in favour of the assessee applicant, however, without any order as to cost.
Source: 53 DLR (2001) 234