Law: Income Tax Ordinance, 1979

Section: 13(1)(aa),13(1)(d),59A,65,148,61,62,55

JUDGMENT Ehsan-ur-Rehman, Judicial Member.- The titled appeal is directed against the order dated 22.8.2001 by the learned CIT(A). Brief facts giving rise to filing of this appeal are that the appellant/assessee is an individual and has been assessed to tax under the head "Salary Income" as a director of a private limited company. It is quite pertinent to bring on record that the assessment for the impugned year was completed u/s 59A at the declared income of Rs.1,20,000/- on 10.3.1997. This fact has very clearly been stated by the assessing officer in the 2nd sentence of the opening para of the assessment order. The assessing officer statedly noticed a disparity in the value of total assets as declared in the wealth tax return and in the wealth statement. This difference represented the not declaring of loan of Rs.5,00,000/- in the wealth tax return whereas the same was claimed as a liability in the wealth statement by deduction from the value of the total wealth. The assessing officer issued notice u/s 148 for ascertaining the genuineness of the amount of loans claimed from four different lenders of money. In response to notice u/s 148 only one of the lender turned up to confirm the advancing of loan, statedly the fact of non-appearance of the rest of three lenders was brought to the notice of the appellant/assessee by the assessing officer but no reply was received from the appellant/assessee. Then the assessing officer found that the construction of house has also been completed in the impugned year, so the assessment was re-opened by invoking the provisions of Section 65 with the prior approval of the 'Inspecting Additional Commissioner. In response to notice u/s 65 return was filed declaring the income at Rs.1,20,000/- which was already declared. Statutory notices u/s 13(2) and 61 were issued on 12.6.2000 for communicating the declared cost of construction was low and as to why the cost of construction with the value of land may not be taken at Rs,30,80,000 by adopting the construction rate of Rs.500 per sq.ft. In reply to this notice the appellant/assessee pleaded before the assessing officer for acceptance of the declared cost which is fair and…

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