Law: Income Tax Ordinance, 2001

Section: 21(c),111(1)(b),111(b),120,122(9),137,15 6

ORDER OF APPEAL CH. SHAHID IQBAL DHILLON (JUDICIAL MEMBER):-----.----- This appeal has been filed by the taxpayer against order of the learned CIR(Appeals)-l, Lahore recorded on 30.12.2011 on the following ground:- i) "That the learned CIR(A) has erred by upholding the disallowance of expenses of Rs.29,28,783/- u/s 21(c) of the Income Tax Ordinance, 2001 as due withholding was deposited by appellant against the demand raised u/s 161 of the Ordinance and thus, mischief of provisions of section 21(c) of the Ordinance were not attracted. ii) That the learned CIR(A) has erred by upholding the disallowance of expenses of Rs.47,51,604/- u/s 21(c) of the Ordinance, representing 'discount' allowed to customers" without appreciating that such amount being in the nature of 'discount' was not subject to deduction of withholding tax. iii) That the learned CIR(A) has erred by upholding ACIR's action of making addition of Rs. 12,98,232/- under section 111(1)(b) of the Ordinance, representing the difference between "provision for taxation provided in financial statements and 'admitted tax liability', by completely disregarding the relevant legal / factual position. iv) That the learned CIR(A) has erred by not allowing the credit for tax of Rs. 4,09,213/- paid u/s 137 of the Ordinance (payable alongwith filing of return), without appreciating the relevant factual position." 2. Brief facts of the case are that the appellant a public limited company derives income from the business of trading of lubricant oil The taxpayer filed return for the tax year 2009 declaring income at Rs 5,52,03,027/- which was deemed to be assessment order in term of section 120 of the Income Tax Ordinance, 2001 The Additional CIR issued show cause notice u/s 122(9) read with section 122(5A) requiring the taxpayer as to why the deemed assessment made u/s 120 of the Ordinance may not be amended. In response to the said notice, the reply submitted by the learned AR was partly accepted by the Additional CIR who proceeded to amend the deemed assessment u/s 122(5A) of the Ordinance vide order dated 27 11.2014 at total income of Rs.9,45,54,710/- after finding the same was erroneous insofar as prejudicial to…

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