Law: Income Tax Ordinance, 1979

Section: 62

Income-tax Ordinance (XXXI of 1979)---S. 62--Determination of net income of assessee in "agreement" with it--Conditions necessary for a valid "agreement": (i) offer; (ii) acceptance and (iii) consideration--Where expenditure claimed by assessee was not open to verification under certain heads of account and assessee with a view to saving itself from a further probe, gave an offer of addition which was accepted by the I.T.O. for making assessment, with the consent of assessee and his counsel and in consequence thereof the assessee was saved from botheration of close scrutiny of books of accounts, three conditions of "agreement", held, were fulfilled and assessment could not by any stretch of imagination be said to be unilateral in circumstances. 1987 P T D (Trib.) 653 and 1988 P T D (Trib.) 22 ref. ORDER SIKANDAR HAYAT KHAN (ACCOUNTANT MEMBER),-- Brief facts giving rise to this appeal are that the assessee, a private limited company, derives income from a rent of building known as Saeeda Chamber. It filed a return to declare net income of Rs.2,16,000 in respect of the previous year relevant to the charge year 1984-85. However, the Income-Tax Officer by virtue of order dated 23-5-1987, passed under section 62 of the Income-Tax Ordinance, 1979 (hereinafter called the Ordinance) determined net income of the assessee at Rs.4,10,000 in agreement with, it. In this connection, relevant part of assessment order is set out below:- "In view of above discussion, the declared version of the expenses is not worth reliance and is rejected. During the course of assessment proceeding, the Managing Director, as per order sheet entry, dated 30-4-1987, agreed to be assessed at net income of Rs.4,10,000. This means that the assessee agreed to total addition of Rs.1,22,547. The offer being reasonable is accepted." 2. Notwithstanding the above agreement, income as assessed was contested in appeal before learned CIT (Appeals), who by virtue of Appeal No.38, dated 30-8-1987, confirmed assessment relating to the charge year 1984-85, in the following words:- "The company wad being represented by the director as well as company's counsel and the latter was quite competent to understand…

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