Through these four appeals filed by the assessee, four separate impugned orders of the learned CIT(A), dated 26-9-2005 for the assessment years 1999-2000 to 2002-2003 have been objected. The rejection of manufacturing accounts and reduction. of cane purchase rate @ Rs.30, Re.1, Rs.20 & Rs.25, resulting trading addition for all the four years under review respectively, addition under section 12(18) of the repealed Income Tax Ordinance, 1979 and disallowance of 15% of the claimed financial expenses for the assessment years 1999-2000 to 2001-2002, applied sale rate @ Rs.17,500 per Metric Ton as against Rs.15,340 and Rs.16,437 declared for the assessment years 1999-2000 and 2000-2001 respectively, disallowance of (i) depreciation on plant or machinery for the assessment years 2000-2001 and 2001-2002, (ii) depreciation on factory building for the assessment years 2001-2002 and 2001-2002, (iii) depreciation on other plant and machinery for the assessment year 2000-2001, (iv) depreciation on account of vehicle for the assessment year 2002-2003 and claimed extra shift allowance for the assessment year 2001-2002, addition under section 13(1)(d) on account of unexplained creditors for the assessment year 1999-2000, addition under section 13(1)(a) on account of unexplained creditors for the assessment year 2001-2002 have been objected by the appellant. For all the four assessment year's under review, the disallowances out of P&L A/c expenses under the head "Travelling and Conveyance", "Printing and Stationery", "Entertainment", "Motor Vehicle Running", "Telephone", "Function/Ceremonies", "Legal and Professional Charges", "Guest House", "Staff Welfare", "Fee & Subscription", "Gardening" and "Miscellaneous Expenses" have been objected, while for the assessment years 1999-2000 and 2000-2001, the disallowance out of "Motor Vehicle Repair and Maint. Expenses", for the assessment year 2002-2003, "Financial Charges" and for the assessment year 1999-2000, the disallowance out of "Repair and Maint." (General) and "Charity and Donation Expenses" have been objected. For the assessment year 1999-2000, the appellant has submitted that "the Assessing Officer has made trading addition at Rs.116,282,258 as well as addition under section 13(1)(a) amounting to Rs.10,131,370. To meet natural justice and as provided in the law, the addition made under section 13(1)(a) merits set off against trading addition. The Assessing Officer has not setoff the said addition against trading addition and the CIT(A) has not adjudicated this ground of appeal".

Mr. Moazzam Zafar, Advocate has appeared on behalf of the appellant and has contended that the appellant is an unlisted Public Limited Company deriving income from manufacturing and sale of sugar. The assessment' year 1999-2000 is the first year of assessment. The return for this year was filed declaring nil income, which were subsequently revised claiming loss of Rs.436,205,933. For the assessment year 2000-2001, return declaring loss of Rs.415,394,756, for the assessment year 2001-2002, loss of Rs.397,44,333 and for the assessment year 2002-2003, loss has been declared at Rs.117,730,924. Along with returns, statement of account consisting of Balance Sheet, Manufacturing Account, Trading Profit and Loss Account and Schedule of Fixed Assets have also been filed. Learned counsel has contended that for all the years under review, all the relevant details, documents and books of accounts were provided and were examined by the Taxation Officer. He has argued that assessment proceedings for the assessment year 1999-2000 were initiated by issuing statutory notice under section 61 of the repealed Income Tax Ordinance, 1979 on 16-3-2002 for compliance on 28-3-2002, on which date, the matter was adjourned, but on the next date i.e. 15-4-2002, the appellant has provided complete books of accounts, details and all supporting documents, but another notice under sections 61/62, dated 17-5-2002 for compliance on 24-5-2002 was issued by the DCIT, which was also duly complied with by the appellant. The Taxation Officer has duly acknowledged the reply and books on the reply letter, dated 30-5-2002, copy of which has also been provided before this Bench. Another notice under sections 61/62 has been issued for compliance on 26-6-2002. The compliance of the said notice has been made on 28-6-2002 with complete required details, explanations of queries and related documents, which as also been acknowledged by the Taxation Officer, but unfortunately for the reasons best known to him has not noted down in the proceedings and diary sheet. Learned counsel has placed before us the attested copy of the diary sheet and has pointed out that in the diary sheet on, dated 28-6-2002, it has specifically been mentioned that "Reply received from Kaleem and Company (C.A.) in response to Notice under sections 62/61, dated 26-6-2002 and P.O.F. "According to the learned counsel, the Taxation Officer has a prejudice and mala fide mind towards the appellant and has therefore tried to make different impression that the letters were without books of accounts. He has contended that similar is the position for the assessment year 2000-2001, as for this year also, books of accounts were furnished before the Assessing Officer as well as before the learned CIT(A). Learned counsel has contended that appellant being a unlisted public company is legally and statutory bound to maintain prescribed books of accounts and supporting vouchers and documents. The books and documents so maintained are subject to audit by independent chartered accountant as well as Govt. agencies such as Sales Tax. Excise, EOBI and Social Security etc. To meet these legal requirements, the company has maintained complete books of accounts consisting of ledgers, cash book, bank book, sales tax register, excise record, production record, wages record, stock registers and gate inward and outward register etc. The appellant in support of declared version has filed complete party-wise detail of sales, purchases, evidence of direct and indirect expenses duly supported by vouchers and books of accounts. According to the learned A.R., complete books of accounts were not only provided to the Assessing Officer, but to his predecessor as well. Again in response to notice under sections 61/62, complete books of accounts were produced for examination along with other details and documents on 30-5-2002. Copy of letter having acknowledgement thereof, dated 30-5-2002 has also been placed before us. He has submitted that these documents were received by giving signature on the front page of letter but no order sheet entry was made on 30-5-2002. Relevant copy of order sheet entry has also been produced before us. He has contended that these details and documents, as directed by the Assessing Officer were again provided on 26-6-2002. The Assessing Officer while making order sheets entry, dated 28-6-2002 erroneously, unjustifiably and malafidely did not mention production of books of accounts. According to him, the mala fide intention is evident from the order sheet entry of the said date, which appears to have been probably made after concluding the proceedings of the day. He has contended that at the appeal stage, all the relevant documents that were produced before the Assessing Officer were again provided to the learned CIT(Appeals) together with written arguments supported with case-laws. The learned CIT(Appeals) without going through the submissions, pronouncements of Hon'ble higher Courts have given unilateral and controversial observations that the appellant has failed to provide relevant details, documents, books requisitioned vide notices under sections 62/61, dated 17-5-2002 and 15-6-2002. This finding of the learned CIT(A) is totally wrong and based on misconceptions, as he never tried to go through the appellant submissions as well as supporting case laws. According to the learned counsel, the Assessing Officer has not pointed out any specific defects through notices issued under section 62(1) and the learned CIT(A) without considering these documents, accounts and violating various pronouncements of Hon'ble higher Courts has unjustifiably and erroneously upheld the Assessing Officer's action regarding rejection of accounts. Relying upon the decisions of the Hon'ble higher Courts, he has submitted that trading account of an assessee cannot be rejected without pointing out specific defects in accounts as well as parallel cases. He has in this respect referred the decision of this Tribunal reported as 2001 PTD 1480 in which, it was held as under:--

"No books of a/c were produced on ground of being lost. No specific notice was issued under section 62, assessment of sales without confrontation of proposed sale. Though officer could not confront with defects in a/c due to absence of books but he should have confronted the assessee with the proposed estimation of sales rather than giving general type of notice which is to no way could be quoted with notice under section 62(1)."

Another decision reported as 1987 PTD (Trib.) 638 has been referred wherein, it has been held that:

"Assessing Officer while rejecting trading results of assessee and estimating sales has to evolve a basis for it------Assessing Officer if wanted to rely upon any parallel case he should confront the assessee with that---where officer failed to evolve such basis and did not confront assessee with cases he relied upon declared version was ordered to be accepted by the Tribunal".

Learned counsel has contended that above all, the facts and case-law cited above remain that the assessment order suffers from legal infirmity. Section 62(1) of the defunct Ordinance vividly stipulates that prior to rejection of declared version, the Assessing Officer is obliged to confront the assessee with the defects noted by him in the books of account maintained by the assessee, but in the present case the notices issued by the Assessing Officer merely spell out submissions of certain details, which had been compiled by the appellant. According to the learned counsel, in no way this notice comes at par or can be equated with the notice to be issued under section 62(1) of the defunct Ordinance and since no such notice has ever been issued according to the law in the present case, which ultimately result into acceptance of declared version of the appellant. He has in this respect placed reliance on the following decisions:--

(a) 1971 SCMR 681, (b) (1994) 50 Tax 48 (Trib.), (c) (1999) 79 Tax 76 (Trib.), (d) 1999 PTD (Trib.) 3896, (e) 2001 PTD (Trib.) 2938 and (f) 2002 PTD (Trib.) 583.

Regarding the adoption of higher sale rate, the learned counsel has contended that the appellant has provided complete party-wise detail of sales of sugar. The declared sales were supported by respective sales agreements etc. Copies of sales tax returns were also provided. Complete bank statements were also provided. The Assessing Officer has applied higher sale rate of Rs.17,500 per M. Ton thereby making addition on the basis of so-called parallel cases of Gojra Sumundari Sugar Mills Ltd. and Channar Sugar Mils Ltd., which are in no' way parallel to the case of the appellant being of .initial years of operation and due to the location of the appellant. He has submitted that the alleged parallel cases were not confronted through specific notice under sections 62 and 62(1) or otherwise, therefore, the action of the Assessing Officer is void and illegal. According to the learned counsel, the learned CIT(A) failed to appraise appellant's submissions therefore has upheld the illegal action of the Assessing Officer. This finding of the learned CIT(A) is totally wrong and based on misconception, as he never tried to go through the appellant's submissions as well as supporting case-laws.

Regarding the curtailment of purchase rate of cane, it has been submitted that the declared purchases were supported by respective copies of CPRS's, complete quantitative party-wise detail of purchases and relevant bank statements and there was no justifiable basis for curtailment of purchase rate of cane.

Regarding the addition under section 13(1)(d), the learned counsel has contended that the appellant declared construction of building measuring 674,474 sq. ft. and cost of construction at Rs.150,748,805 yielding cost of Rs.223.50 per sq. ft. Complete details comprising approval, site-plan, agreements with construction contractors etc. were provided. It is vehemently contested that there was no suppression of cost of construction being the bank finance project. He has contended that the Assessing Officer has not considered the submissions and unjustifiably relying upon incomparable case has adopted cost of construction @ Rs.350 per sq.ft. resulting in huge, unjustified and exorbitant addition under section 13(1)(d) of Rs.105,657,961. According to the learned counsel, the Assessing Officer failed to put on record any material evidence regarding lowness of the cost of construction and without making any spot inspection personally or through a nominee or obtaining any expert opinion regarding the quality of construction of the building has made the addition. As such, he has no basis or justification for increasing the cost of construction and making addition under section 13(1)(d). He has in this respect referred reported case of this Tribunal cited as 1989 PTD 311 wherein it was held that:

"Mere lowness of cost of construction declared by assessee not sufficient to discard the declared version---Parallel cases not a safe guide as no two houses could be compared for cost of construction. The type of construction etc. has to be kept in view. This can be only done either through an expert opinion or through a spot inspection by the Assessing Officer or his nominee".

He has referred another reported case cited as 1994 PTD (Trio.) 1268, wherein it has been held that:--

"Under section 13(l)(d)(e), the addition regarding construction of building where declared cost by the assessee was neither ridiculously low nor otherwise appeared unusual for the kind of construction and stated covered areas, the addition made was merely only conjecture and was not legal in circumstances".

According to the learned counsel, the learned CIT(A) too misconceived the facts and submissions thereof while deciding appellant's appeal and has unjustifiably in a summarize manner upheld the action under this head.

Regarding the addition under section 13(1)(a), it has been contended that the appellant has provided detail along with break up of creditors under various heads amounting to Rs.47,291,401. Complete particulars of the parties together with supporting accounts, documents and copies of respective ledger accounts were provided. It was explained to the Assessing Officer that most of the payable amounts 'represent payable to suppliers and contractors, hence the amount of creditors was fully verifiable and merits acceptance. The Assessing Officer has pointed out a few instances of incomplete addresses in the assessment order, but he miserably failed to point out these unverifiable parties through specific notice under section 62(1). In this way, the appellant has not been provided proper opportunity to verify the veracity of these creditors. According to the' learned counsel, the appellant has been penalized illegally, injudiciously and unheard.

He has contended that while making addition under section 13(1)(a) of Rs.10,131,377, the Assessing Officer has violated C.B.R.'s instructions issued vide letter C.No.7 (2)DT-14/91, dated 2-4-1991. He has contended that during the hearing of the appeal, the learned CIT(A) never pointed out any party of incomplete addresses and unjustifiably upheld the addition made by the Assessing Officer under this head.

Regarding the addition under section 12(18), it has been contended that complete detail of advances prepayments etc., was provided showing complete particulars of the parties. Copies of bank statements were also filed to authenticate the transaction being through banking channels. He has contended that in response to notice under section 62, copies of already filed details together with relevant bank statements were again provided, which rendered the entire claim fully verifiable. It has been strongly contested that the transaction made with the alleged parties were through normal banking channel and verifiable. The Assessing Officer, however, did not look into the facts and made additions under section 12(18) of the repealed Income Tax Ordinance, 1979. He has contended that the learned CIT(A) without going through the filed bank statements and details in support of advances has unjustifiably upheld the additions under this head. Learned counsel has argued that advances were admittedly trade advances against which the appellant was to make sales and hence these formed part of trading result. Such as these advances have been subjected to tax by the Assessing Officer with the reason for invoking section 12(18) was that the appellant could not substantiate that these were received through cross bank cheques. He has contended that the action of the Assessing Officer is illegal, unjustified and unwarranted, as section 12(18) of the defunct Ordinance, 1979 wherein the legislature has used the 'expression `advance' in between the expression `loan and gift', accordingly, the expression advance should not be taken inform on isolated or detached manner, disassociated the context, but is to be read together and construed in the light of the purpose and object of the Act itself, so the expression `advance' is to be interpreted in the light of words associated to it and not in isolation. In support of this, reliance has been placed on a reported judgment cited as 1973 PTD 453, wherein the Hon'ble High Court has held that:

"Meaning to a particular expression is to be assigned in the light of other expression used by the legislature in a statutory provision".

He is, therefore, of the view that the expression `loan' and `gift' clearly relate to non-business financial transaction, therefore, the expression `advance' being connected to the other two, is also in the nature of non-business financial transaction. Since the advances on which the provisions of section 12(18) has been invoked are business advances, therefore, are not hit by mischief of section 12(18) of defunct Ordinance, 1979. He has in this respect referred C.B.R. Circular No.3 of 1992, which reveals that:

"The matter has been considered in the Board since the basic purpose of the aforesaid provision of law is to check fictitious loans,,.." .

As such, section 12(18) is meant to check fictitious transactions. Since the Assessing Officer has not anywhere in the assessment observed that the advances were fictitious. Obviously, no fictitious element in the advance is available and Assessing Officer fully agreed to this, therefore, the provisions were not applicable in the case of the appellant. He has in this respect referred the new Ordinance, 2001. Section 39(3)(4), which is the parallel of section 12(18) of the defunct Ordinance, 1979 and provides exemption from charge-ability of tax of business advances received against sales of goods or supply. He has contended that the action under defunct Ordinance, is protected vide section 239(9) in the Income Tax Ordinance, 2001, wherein it has been provided that:--

"(9) Anything done or action taken under the repealed Ordinance in so far as it is not inconsistent with the provision of this Ordinance shall, without prejudice to anything already done or any action already taken,- be treated as having been done or taken under this Ordinance."

He has, therefore, contended that the illegal addition made by the Assessing Officer under section 12(18) may please be deleted.

Regarding the depreciation, it has been contended that the appellant declared cost of plant and machinery worth Rs.773,414,731. Since this was the first year of production apart from normal depreciation, extra shift and initial depreciation has been claimed at Rs.306,272,233. Complete details supporting vouchers and invoices and copies of L.Cs for purchase of machinery have been provided. During the assessment proceedings and after examination of detail and accounts, the Assessing Officer has admitted in the assessment order that the complete purchase invoice of machinery through inland LC by Bankers Equity Ltd. from Hudabiya Engineering is on the record, but without any justification has observed that claim in this respect was unverifiable due to lack of documents and that some invoices of plant and machinery pertains to assessment year 1998-99 and the invoices of some machinery pertain to succeeding assessment years. Learned counsel has submitted that the Assessing Officer has curtailed the claim of depreciation to Rs.138,500,881 without any justifiable reason. He has contended that it was vehemently contested before the learned CIT(A) that complete details, documents and supporting vouchers have already been provided. He has argued that as regard machinery through L/C documents what else did the Assessing Officer require for the verification of purchase of machinery. He has placed a copy of L/C in support of his contention. As regards machinery of value of Rs.2,691,500 relating to the year 1998-99, it has been contended that these have to be included in the machinery cost for 1999-2000 being the first year of production. According to the learned counsel, it is interesting and surprising to note that out of total cost of machinery of Rs.773,414,731, the Assessing Officer has noted that vital machinery like shredder, hammer cost just Rs.350,000 was purchased on 3-3-1998 during the closing period of the crushing season and this has created serious doubts in his mind regarding the genuineness of the evidence produced by the assessee. According to the learned counsel, the Assessing Officer seems to be unaware of the fact that the original cost of shredder hammer is Rs.4549,650, which is covered by the inland L/C of Rs.470,000,000. Other examples quoted regarding acquisition of machinery are also well before the closing of crushing seasons (31-12-1997 and 27-1-1998). As such, the doubts raised by Assessing Officer are self created of his confused mind. In view of these facts, learned counsel for the assessee has contended that Assessing Officer had no justification to curtail the claim of depreciation. Moreover, to meet the norm of justice, he should have confronted the appellant before making such disallowance. He has contended that the learned CIT(A) totally misconceived the submissions made on behalf of the assesses and without applying his mind has unjustifiably upheld the action of Assessing Officer.

Regarding the addition on account of Lease Finance Assets, which is the subject-matter only for the assessment year 2001-2002, it has been contended that the appellant claimed liability under the head assets subject to lease finance with complete detail of liability claimed under this head at Rs.1,238,798. Relevant supporting documents such as bank statement payment schedule of leasing company was provided. It has been contended that the Assessing Officer without considering these documents has added the entire claimed liability and the learned CIT(A) has ignored the factual fact that the appellant has obtained assets on lease which has been declared in the schedule of assets. It has been argued that the learned CIT(A) without considering these submissions has upheld the addition.

Regarding the additions out of P&L A/c expenses, it has been contended that the assessee claimed various expenses in the Profit and Loss A/c during the course of assessment proceedings, complete detail and evidence of expenses, claimed under various heads in the Profit and Loss A/c was provided to the Assessing Officer. The Taxation Officer has unjustifiably, without pointing out any specific instances of unverifiability and unvouched nature of expenses through specific notices has made certain unjustified additions out of Profit and Loss A/c. The learned CIT(A) unjustifiably and without considering the facts of the case that this is the first year of assessment has observed that in view of the history, the quantum of additions is excessive and harsh. Obviously, according to the learned counsel, he did not apply his own mind and adjudicated the appeal. He has contended that the claimed expenses are verifiably and should have to be deleted.

Regarding the disallowance of financial expenses, it has been contended that the appellant has claimed financial charges, complete details duly supported with relevant bank statements has been provided rendering the entire claim of financial charges fully verifiable. The Assessing Officer, however, without considering these documents and on erroneous pretexts has unjustifiably and without applying judicious mind has disallowed certain amount of financial charges. Learned counsel has contended that during the appeal proceedings before the learned CIT(A), relevant detail along with bank statement was again filed regarding rendering entire claim under this head fully verifiable. These details have been placed before this Bench also. He has contended that the learned CIT(A) is totally unjustified by observing that no positive efforts have been made to get verify this expense.

Learned counsel for the assessee has further submitted that the assessment for the period under appeal was made after making trading addition as well as addition under section 13(1) (a), but the repealed Income Tax O