Law: Income Tax Ordinance, 2001

Section: 120,120(1),122(5),122(1),177,174(2)

Income Tax Ordinance (XLIX of 2001)...... Sections 120(1), 122(5), 122(1), 177, 174(2),, Assessment,,. Amendment,.. Audit, selected for,, Addition,, Show-cause Notice,, Claim,, Expenses,.. Verification,, Relief,, Learned CIR(A) had not mentioned any reason for curtailment of additions made by the Taxation Officer on account of unverifiable nature of the expenses, for instance, the addition on account of trading expense was reduced from Rs.1,451,000/- to Rs.940,000/- by just mentioning; "however, some of these additions are curtailed to the following extent being found excessive", same was the case with other additions under heads "other disallowances" at Rs. 1,590,000/- and 'Defense Shopping Mall' where the additions were curtailed without pinpointing any defect in the additions made by the learned Taxation Officer, the learned CIR(A) had not realized that he was not deciding the appeal under the R.O., 1979, the Income Tax Ordinance, 2001 has undergone a sea-change in that Section 174(2) authorizes the Taxation Officer to disallow or reduce the taxpayer's claim,, Additions were made on account of unverifiable nature of as the expenses, the appellant could not produce any evidence contrary to the observations of the learned Taxation Officer,, The impugned order passed by the learned CIR(A) being not based on solid reason was vacated and the order passed by the Taxation Officer was restored,, JUDGMENT This appeal has been filed by the CIR, Zone-XII, RTO-II, Lahore to impugn the order passed by the Commissioner Inland Revenue, Appeals-III Lahore vide No.80 dated 28.01.2011. The Department contested the relief allowed by the CIR(A). 2. Relevant facts in brief are that taxpayer filed return for the tax year 2008 under USAS declaring loss of Rs.(30,235,103) which was treated as an assessment order in terms of Section 120(1) of the Income Tax Ordinance, 2001 by the Taxation Officer Inland Revenue, Unit-07, Audit Division-II, RTO, Lahore and notice in this regard was served upon the taxpayer. Finally the Taxation Officer passed assessment order U/S 122(5)/122(1) of the Income Tax Ordinance, 2001 at a loss of Rs. (1,664,347). Being aggrieved with the treatment of the…

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