Law: Income Tax Ordinance, 2001

Section: 120,122(9),122(1)

[Income Tax Ordinance (XLIX of 2001)]...... Sections 120, 122(9), 122(1),, Returns,.. Purchase of vehicles,,. Show-cause Notice,.. Assessment,, Amendment,.. In keeping with the agreement made by the Chief Commissioner Inland Revenue, RTO (I & II) Lahore, and the Car Dealers, regarding profit earned on the sale of motor vehicles, income was assessed at Rs.420,000/- and Rs. 17,15,000/- for tax years 2009 and 2010 respectively,, Tax-payer argued that the department raised demand against the tax-payer on vague information, presumption and sketchy enquiry through the Income Tax Inspector,, D.R argued that the demand was raised on the basis of enquiry report and on the basis of presumption, further argued that tax-payer had deposited the amount of tax demanded to avoid penalties,,. Definite Information,, Tribunal reached the conclusion that the departmental proceedings did not qualify criteria of definite information as adjudged in certain decisions of the courts referred below,, Department further tried to support its case on the basis of the above inquiry report of Inspector Inland Revenue, Law does not recognize any enquiry without associating the stock holders, this sketchy report even cannot be called an inquiry as it was without any detail and proof, just few lines of the Inspector Inland Revenue was a guess work and presumption,... Therefore, Tribunal vacated both the orders below being devoid of merit irrespective of the fact that tax-payer had deposited the impugned demand,, 2011 PTD (Trib.) 187, 2009 PTD (Trib.) 1990, (2005) 92 TAX 84 (H.C. Kar.) followed. ORDER 1. This order will dispose of subject appeals filed by M/s. Khawaja Muhammad Ilyas, R/o, Street No. 18, Gurunanakpura, Gujranwala against the order No.192 and 206 dated 20-12-2011 passed by learned CIR (Appeals), Gujranwala. 2. Brief facts of the case are that returns of income for the year 2009 and 2010 were filed declaring income of Rs.24.000/- and 68,000/- which were accepted u/s.120 of the Income Tax Ordinance, 2001. Later on it transpired that taxpayer purchased 12 motor vehicles in tax year 2009 for a consideration of Rs.1,60,98,000/- and 34 vehicles in tax year 2010 for a consideration of…

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