Law: Income Tax Ordinance, 2001

Section: 2(10),4B,18,21(C),37,37A,37(1A),39(3),11 1,111(1)(d),122(1),122(9),177,177(1)

Law: Constitution of Pakistan, 1973

Section: 141,142

INCOME TAX ORDINANCE, 2001 (XLIX OF 2001)-----Sections: 2(10), 4B, 18, 21(C), 37, 37A, 37(1A), 39(3), 111, 111(1)(d), 122(1), 122(9), 177 & 177(1) - Constitution of Pakistan, 1973, Articles 141 & 142 - Entry No. 50- Amendment of assessments - Unexplained income of assets - Super tax - Selection of case for audit - Appellant is a private Ltd: Company, engaged in the business of construction and property development - Case selected for audit and the proceedings culminated in amendment u/s 122(1) of deemed assessment order - Rejection of appeal by the CIR(A) - Challenge to - FACTS Brief facts of the case are that the appellant is a Private Limited Company engaged in the business of construction and property development. The appellant e-filed its return of income for the Tax Year 2017 which became a deemed assessment order by operation of law. However, the Commissioner- IR Zone-III, CTO, Karachi selected the case for audit under section 177(1) of the Ordinance. The audit proceedings culminated in amendment order u/s 122(1). ARGUMENTS The counsel of the appellant/taxpayer assailed vehemently the orders of both authorities. Relying upon the various case law of superior courts, he contended that the appellant made a bona fide claim of capital gain of Rs.6,811,435,201 which was rejected by the officer. arbitrarily by deliberately ignoring the facts of the case available in the grounds of appeal as well as on record. On the other hand, the learned D.R vehemently opposed the contentions of the learned A.R and supported the order passed by the learned CIR(A). He further contended that the learned CIR(A) rightly confirmed the order passed by the Commissioner Inland Revenue. DECISION (a) Intention at the time of purchase is of vital import - It is clear from the above mentioned criteria that intention at the time of purchase is of vital import and in the instant case the intention coupled with the surrounding circumstances (no advance booking or ads for sale etc) is very clear i.e. the appellant did not intend to sell the said property in its ordinary course of business. Thus the appellant’s claim of capital gain is declared to be genuine which is governed under section 37…

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