Law: Income Tax Ordinance, 2001

Section: 39,40(4),113,120(1),122,122(5),122(5A)

INCOME TAX ORDINANCE, 2001 (XLIX OF 2001) Sections: 39, 40(4), 113. 120(1), 122 122(5) - Amendment of assessments - Income from other sources - Deduction in computing income chargeable under the head Income from other sources - Minimum tax on the income of certain persons - Public Ltd. Company - Deriving income from electric power generation transmission and distribution of same - Deemed assessment order found erroneous in so far as prejudicial to the interest of revenue - Show Cause Notice u/s 122(9) issued - Addition made under various heads - Appeal allowed under head taxation of interest on gross basis, minimum tax liability on capacity payment and charge of WWF, whereas disallowed appeal on account of profit on disposal of property, plant and equipment - Cross appeals before Tribunal - FACTS Brief facts of the case are that the taxpayer is a public limited company deriving income from electric power generation, transmission and distribution of the same, filed return for tax year 2012 on 31.12.2012 declaring taxable income u/s 39 at Rs.3,340,348 and income from power project at Rs.814,653,390 was claimed as exempt under clause (132) of Part I of the Second Schedule to the Income Tax Ordinance, 2001 (hereinafter referred as the Ordinance). The return filed by the appellant declaring his self assessed income and tax liability was taken to be an assessment order in terms of section 120(1) of the Ordinance, Subsequently, it was observed by the OIR that the deemed assessment order was erroneous in so far as prejudicial to the interest of revenue, therefore, he issued notice u/s 122(9) of the Ordinance, The OIR observed that under clause (132) of Part I of the Second Schedule to the Income Tax Ordinance, 2001 only the profits and gains from the electric power generation project have been allowed exemption from tax and not the income from all sources or of all types, whereas, the accounts annexed with the return show that the appellant derived income during the tax year 2012 therein certain income/receipts were declared which do not come in the ambit of clause (132) of Part I of the Second Schedule, therefore, he amended the deemed assessment by making addition…

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