Law: Income Tax Ordinance, 2001

Section: 10(2)(xvi),10(2)(xivA),20,32,60B,67,71,1 20(1),122(5A),149,154

THIS ORDER PASSED BY: MUHAMMAD AHMAD, (ACCOUNTANT MEMBER):---.--- The captioned appeal, filed by a public listed company engaged in the business of manufacture and sale of cement, impugns appellate order passed by the learned CIR(A) dated 21-09-2015 pertaining to the tax year 2009. 2. Facts of the case in brief are that the return filed by taxpayer declaring income at Rs 398,808,682/- was firstly taken as deemed order in terms of Section 120(1) of the Income Tax Ordinance. The said order was amended vide order dated 21 02 2012 on the issue of taxation of dividend income. Subsequently, the Additional Commissioner found the deemed order as erroneous in so far as prejudicial to the interest of revenue. Therefore, a show case notice was issued and considering the reply furnished by the taxpayer as unsatisfactory amended order u/s 125(5A) was passed by making certain additions as a result of which income had been determined at Rs 1,149.913.753/-. Being dis-satisfied the taxpayer filed appeal before the CIR(A) who vide order dated 21.09.2015 confirmed the treatment accorded by the assessing officer. The taxpayer still being aggrieved has come up in further appeal and challenged the impugned order on the under-mentioned issues which are disposed of after considering the submissions of rival counsels, available record and the case law relied upon from both the sides as under: Determination of sales ratio for apportionment of expenses: Ratio for the purposes of allocation of common expenses to local and export sales the learned CIR(A) completely ignored the position settled by the Appellate Tribunal Inland Revenue, Lahore in appellant's own case for tax years 2012 and 2013. It was pointed out that the CIR(A) has erred in upholding the ACIR's action. Moreover, it was contended that the ACIR determined the sales ratio for the purposes of apportionment of 'common expenses' by subtracting the amounts on account of Federal Excise Duty Sales Tax/Special Excise Duty whereas these amounts, being component of 'gross receipts', were not required to be excluded from receipts. The contention of the AR in this connection was that for the purposes of determination of said ratio…

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