Law: Income Tax Ordinance, 2001

Section: 111,111(1)(d)(i),122(5),127,129,129(1)(a ),129(9),174,174(2)

THIS ORDER PASSED BY: MIAN ABDUL BASIT, JUDICIAL MEMBER:---.--- Titled appeal has been filed by the taxpayer against Order No.1443/2018 dated 11.05.2018 passed under section 129 of the Income Tax Ordinance, 2001 by learned Commissioner IR (Appeals-III), Rawalpindi. The taxpayer has raised grounds in the Memo of Appeal, reproduced below: (a)... (b) that case was selected for total audit and during assessment proceedings, the appellant filed his bank statement in which credit entries were Rs.38,748,976/- whereas he declared sales at Rs.2,782,000/- and gross commission receipts at Rs.1,75,000/- (commission @2.5% on sale of goods of Beoparies). The different between declared sales and credit entries were Rs.35,966,976/- and the same have been added u/s 111(1)(d)(i) of the Ordinance which is not justified as the appellant had declared/filed has bank statement voluntarily. (c) that the DOR issued a show cause notice u/s 122(9) that difference of your sales declared and bank credit entries will be added in your income u/s 111(1)(d)(i) if you offers no explanation about the nature and source of the amount credited in bank account. (d) In the reply it was explained that appellant has filed his bank statement which shows the credit entries of Rs.38,748,976/- This is the sates amount of the goods (tea and rice) which were paid to the suppliers by cheques and the same can be verified easily from the bank statement as it has been mentioned before the debit entries "cheque withdrawal internal" which is crystal dear that these amounts have been paid to suppliers after sale of their goods, hence these credit entries may not be considered as income of the assessee but sales of the assessee as these are business transactions but the learned DCIR did not accept the plea of the appellant which is not justified. (e) learned DCIR himself accepted the credit entries in the bank account are sales of the appellant as he excludes the sales declared from the credit entries as under: Total bank credit entries Rs.38,748,976/- Less sales of tea declared Rs.2,782,000/- Balance amount added u/s 111 Rs.35,966,976/- The CIR (A) has mentioned in the appellate order that since the AR could not…

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