Law:

Section:

Income Tax Ordinance, 1979 (XXXI of 1979)-- ----S. 12(18)--Violation--Fictitious cheques--Income tax assessee filed return for specified year declaring income tax--Assessee had obtained loan from company through two cheques--Assessing officer added amount of loan to the income of appellant u/S. 12(18)--Assailed--Every transaction of claimed loan otherwise than by a crossed cheque drawn on a bank was hit by mischief of S. 12(18) as it existed before the substitution by Finance Act, 1998 also CBR's Circular dated 27.1.92 and other, issued earlier, being against the provision of statute, could not be considered to interpret S. 12 (18) favourably to taxpayer--Held: CBR committed no excess of jurisdiction in issuing circulars; and as the appellant/assessee had obtained the loan through bearer cheques which fact was verified by the concerned Bank--Appeal allowed, impugned order was setaside and it was declared that Assessing Officer could not make the addition of specified amount u/S. 12(18). Judgment Syed Hamid Ali Shah, J.--This is an appeal under Section 136 (1) of the repealed Income Tax Ordinance, 1979 (hereinafter "the Ordinance") as it stood at the relevant time. Through this appeal the appellant/assesee has sought setting aside of the judgment passed by the Income Tax Appellate Tribunal (ITAT) in I.T.A. No. 6453/LB/1995 dated 15.12.1998 and deletion of the addition made in the income of the appellant of Rs. 4,80,000/- under Section 12 (18) of the Ordinance. 2. The appellant, who is director of M/s Surgeon Surgical (Pvt) Ltd., filed his Income Tax Return for the assessment year 1992-93 declaring income of Rs. 51,716/- from salary. During the relevant Income Year the appellant had obtained loan from his company through two bearer cheques for Rs. 3,00,000/- and Rs. 1,80,000/- dated 18.04.1992 and 28.04.1992 respectively. The Assessing Officer confronted his intention to the appellant to add the amount to his income under Section 12 (18) as the loan had not been obtained through a crossed cheque. The appellant replied that this sub-section could not be invoked in case of genuine loans duly verified by the blank and in support of his contention referred to…

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