Law:

Section:

Income Tax Ordinance (XLIX of 2001)--- ----Ss. 7, 21(c), 111, 122, 131 & 152---Amendment of assessment---Deletion of additions---Assessee, who was engaged in the business of freight forwarding agent and logistic services was selected for audit under S.177(4)(d) of Income Tax Ordinance, 2001---After conducting of audit proceedings the deemed order was amended under S.122(1) of Income Tax Ordinance, 2001 by making add backs of freight paid to Shifting Companies and Airlines for non-deducting of tax under S.152 of Ordinance, 2001 and also under S.111 of the Ordinance---Department aggrieved by the order under S.122(1) of Income Tax Ordinance, 2001 preferred appeal to the Commissioner (Appeals) and Commissioner vide appellate order deleted both the additions---Validity---Provisions of S.152(2) of Income Tax Ordinance, 2001, were not applicable where the non-resident person was not chargeable to tax in respect of the amount---List of carrier was available on record and the entire freight had been to those persons, who were not chargeable to tax in view of the double taxation treaty with China, USA etc.---Provisions of S.152 of Income Tax Ordinance, 2001 being not applicable in the case, order of Commissioner (Appeals) was confirmed on that point---No addition could be made under the section without confronting the aggrieved person---Assessee before making any addition, must have been given an opportunity of being heard---Mandatory requirements having been violated in the case, no addition was to be made---Order of Commissioner (Appeals) on that point was also confirmed. 2010 PTD 1159; 2010 PTD 704 and 2009 PTD 1791 ref. ORDER The appeal in this case has been filed by the Commissioner Inland Revenue (legal) division against order of the learned CIR(A) Zone-II order number 34 dated 17-10-2009 on the following grounds: (1) That the order of learned commissioner of Income Tax (Appeals) is bad in law and contrary on the facts of the case. (2) That the learned Commissioner of Income Tax (Appeals) is not justified to delete the addition of Rs.151,356,693 made under section 21(c) of Income Tax Ordinance, 2001 as ITAT has decided the issue in favour of department in a…

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