Law: Income Tax Ordinance, 2001

Section: 111(1)(a),122(1)(d),122(4),182,214C

THIS ORDER PASSED BY: CH. SHAHID IQBAL DHILLON, JUDICIAL MEMBER:---.--- This appeal has been filed by the taxpayer against order of the learned CIR(A), Faisalabad recorded on 07.5.2014. 2. Brief facts of the case are that the taxpayer, a private limited company, derives income from manufacturing of other Food Products and sale thereof. The taxpayer filed return at FBR e-Portal on 29.01.2013 which was subsequently revised on 02.05.2013 declaring net profit-at Rs.3,23,617/- for the tax year 2012. The taxpayer's case was selected for audit u/s 214C of the Income Tax Ordinance, 2001. During the course of proceedings, the DCIR obtained information u/s 176 of the Ordinance from Habib-Bank Limited, Madina Town Branch, Faisalabad. From comparison of the financial statements obtained from the Habib Bank Ltd, and the original financial statements e-filed with the return, the DCSR observed that the taxpayer had not declared its income correctly. The information document request (IDR) was issued after selection of the case but the taxpayer did not produce complete books of account. He issued notice u/s 122(9) of the Ordinance by relying upon the judgment of the august Supreme Court of Pakistan reported as 1990 (62) Tax 57 (S.C) and a judgment of honourable Lahore High Court repotted as 83 Tax 487. The DCIR did not accept the contention of the taxpayer that original financial statements e-filed with the return are correct being prepared from actual books of account maintained by the taxpayer and those financial statements obtained from the bank are inflated and imaginary as these are prepared for purpose of sanctioning of bank loan. The DCIR, on the basis of financial statements, obtained from the bank inferred that during the tax year, the taxpayer concealed his true particulars of income and relying upon the judgments of the honourable superior courts cited supra made assessment u/s 122(4) of the Ordinance as per the figures intimated to the bank by the taxpayer in the financial statements. The DCIR while computing the income of the taxpayer, made four additions u/s 111(1)(a) of the Ordinance at Rs.4,47,75,373/-, Rs.59,57,941/-, Rs.5,01,524/- and Rs.3,31,320/-…

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