Law: Income Tax Ordinance, 2001

Section: 21(c),40,40(1),40(3),122(5A),131

Income Tax Ordinance (XLIX of 2001)-- --Ss. 21(c), 40(1)(3), 122(5-A) & 131--Amendment of assessment-- Declaring lease, rentals under the head 'income from other sources -- Additions--Return filed by the taxpayer for the tax year 2010, was deemed to be treated as assessment--Subsequently, it was found by the department that deemed assessment was erroneous insofar as prejudicial in the interest of Revenue; in as much as the taxpayer had declared lease rentals under the head "income from other sources", and expenses deemed by the taxpayer, were not allowable against such income under S.40 of the Income Tax Ordinance, 2001--Assessment was amended, whereby an aggregate addition under S. 40(1) under head "operating expenses"; addition under S.40(3) of Income Tax Ordinance, 2001 under the head "depreciation" and addition under S.21(c) under the head "auditor remuneration", were made by Assessing Officer--Appellate Authority had upheld all said additions-- Validity--No infirmity existed in the impugned orders, which would warrant interference--Taxpayer had leased out all its assets, and he only derived lease rentals--Operating expenses claimed against said income were not allowable; as those had no direct nexus while earning such income--Under S.40(1) of the Income Tax Ordinance, 2001, the taxpayer was only entitled to claim those expenses, which had directly been attributed to such, income---Appellate Authority, had rightly upheld additions made under S.40(1)(3) of Income Tax Ordinance, 2001, as taxpayer had failed to point out any nexus of the assets issued in earning income declared during relevant year--Matter of addition made under S. 21(c) of Income Tax Ordinance, 2001, was remanded to the Assessing Officer for verification as the audit remuneration paid to the Chartered Accountant Firm, was subject to deduction of tax or not. THIS ORDER PASSED BY: CH. ANWAAR UL HAQ (JUDICIAL MEMBER).--The titled appeal pertaining to tax year 2010 has been preferred at the instance of taxpayer, against order dated 13.06.2013, passed by the learned CIR(A), Gujranwala. 2. None appeared on behalf of taxpayer despite proper service of hearing notice while Ms. Bushra Fatima,…

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