Law: Income Tax Ordinance, 2001

Section: 111(1)(b),122(1),174,214C

ORDER These cross appeals have been filed by the taxpayer as well as the Department against order No.431/2014 dated 04.02.2015 passed by Commissioner Inland Revenue Appeals (CIR-III) Rawalpindi. As per facts the taxpayer an individual filed return for tax year 2012 declaring income of Rs.355,425/- from the business of electrical goods. This return constituted deemed assessment order u/s 120 of the Income tax Ordinance, 2001. This case was selected for audit by FBR in terms of section 214C. Proceedings were started for amendment of assessment. The taxpayer was confronted on different issues. Finally the amended assessment order u/s 122(1) was issued add back was made u/s 174 amounting to Rs.864,825/- due to unverifiability of purchases. Moreover addition of Rs.2,463,390/- u/s 111(1)(b) as unexplained investment in the purchase of two vehicles. The taxpayer filed appeal contesting the vires of proceedings and legality of above mentioned additions. The CIR(A) after taking into account the relevant facts and documents deleted the addition of Rs. 1,500,000/- u/s 111(1)(b) relating to purchase of vehicles. However, explanation of the taxpayer relating to sources of investment of Rs.700,000/- was not accepted and addition of this amount was confirmed. A further amount of Rs 263,390/ added by the taxation officer u/s 111(1)(b) was confirmed. In this manner addition u/s 111(1)(b) on account of unexplained investment in the purchase of vehicles amounting to Rs.963,390/- (700000+263,390) was confirmed. The addition made by the assessing officer u/s 174 at the rate of 25% of purchases was reduced to 20%. The taxpayer being dissatisfied with the orders of CIR(A) filed appeal against confirmation of above mentioned addition u/s 111(1)(b) and confirmation of addition of 20% of purchases for being unverifiable. The department has also filed second appeal contesting the deletion of addition of Rs 1500,000 u/s 111(1)(b) and relief in the addition on account of unverifiable purchases. Learned AR stated that the taxpayer purchased two cars on 20.09.2011 and 24.09.2011 respectively for total consideration of Rs.3,050,000/-. The investment in the purchase of vehicles was arranged…

Deprecated: trim(): Passing null to parameter #1 ($string) of type string is deprecated in /home/digixyei/sldsystempk.com/view/master-layout/view_case.php on line 492