Law: Income Tax Ordinance, 2001

Section: 111,111(1)(b),122(9),177

Income Tax Ordinance (XLIX of 2001)---Ss. 111(1)(b), 122(9) & 177---Unexplained income or assets---Addition---Tax year 2007---Taxpayer contended that addition had been made in wrong tax year i.e. tax year 2007 while the addition could only be made in the tax year 2008 as the notice under S.122(9) of the Income Tax Ordinance, 2001 was issued as on 16-3-2009; and before making addition, the tax payer was also not confronted by way of issuance of notice under S.111(1)(b) of the Income Tax Ordinance, 2001---Validity---Addition was made under 5.111 of the Income Tax Ordinance, 2001 in the tax year 2007 on the basis of information, against which notice under S.122(9) of the Income Tax Ordinance, 2001 was issued to the taxpayer on 16-3-2009, which fell in the financial year 2009---Addition under S.111(1) of the Income Tax Ordinance, 2001, if any, was required to be made in tax year 2008 being immediately preceding the financial year in which it was discovered---Addition under S.111 of the Income Tax Ordinance, 2001 having been made in the tax year 2007, not being the immediately preceding tax year of the year of discovery, was not in accordance with law and merited deletion---Orders passed by both the authorities below were vacated by the Appellate Tribunal and appeal was accepted by way of deletion of addition made under S.111(1)(b) of the Income Tax Ordinance, 2001. I.T.As. Nos. 756 and 757/LB/2009 dated 2009 rel. ORDER The above titled appeal pertaining to tax year 2007 at the instance of the taxpayer has been directed against the appellate order dated 28-10-2010, recorded by CIR(Appeals-III), Lahore, whereby confirmation of addition amounting to Rs. 30,00,000 made under section 111(1)(b) of the Income Tax Ordinance, 2001 (hereinafter called the Ordinance) has been agitated. 2. Brief facts emanating from record are that the taxpayer, an individual, derives income from show business. For the year under consideration, the case of the, taxpayer was selected for audit under section 177 of the Ordinance, as a result of which it was observed that the taxpayer had purchased two plots i.e., 1-Kanal Plot No.R-580, Phase-VII, DHA, Lahore on 8-3-2005 and.1-Kanal Plot…

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