Law: Income Tax Ordinance, 2001

Section: 21,111(1)(a),116,120(1),122(1),122(5),17 4(2),177,

THIS ORDER PASSED BY: CH. SHAHID IQBAL DHILLON, JUDICIAL MEMBER:---.--- Titled appeal has been preferred at the instance of ^Taxpayer against the order dated 25.02.2016, passed by the learned CIR(Appeals), Lahore, pertaining to tax year 2009. 2. Brief facts of the case are that the appellant is an individual derives income as doctor, filed income tax return for the tax year 2009 by declaring income of Rs.763,453/- which was deemed to have been assessed under section 120(1) of the Income Tax Ordinance, 2001 (hereinafter called the 'Ordinance'). Later on, the case was selected for audit under section 177 of the Ordinance for audit of income tax affairs of the appellant. Intimation was sent to the taxpayer in this regard and subsequently show cause notice was also issued to him. During the scrutiny of income tax record of the taxpayer following discrepancies were observed by the assessing officer and confronted to the taxpayer. (i) Receipts for the tax year 2009 has been declared at Rs.335000/- and P&L expenses claimed at Rs. 275,000/- yielding a ration of 82% of the total declared receipts. This ratio is considerably high and not in consonance with the same line of business. This aspect required verification with regard to their admissibility and genuineness in terms of section 21 and 174(2) of the Income Tax Ordinance, 2001. (ii) As per non invasive inquiry you are a leading practitioner in the filed of medicine and receiving handsome fee from Rs.1300/- to Rs.1500/- for check up of one patient Your annual receipts break up shows that your daily receipts at Rs. 1116/- which less than one patient fee your received. Moreover your checked more than forty patients daily which is far less than your declaration. Therefore, your tax affair needs verification and thorough probe. (iii) Since your declared income for the year exceed Rs. 500000/- thus you are obliged to file the wealth statement along with return of total income. Non filing is against the provision of law u/s 116 of the Income Tax Ordinance, 2001. Due to this infirmity your case required scrutiny and examination. (iv) You have not shown the amount of capital employed in the business in the relevant…

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