Law: Income Tax Ordinance, 1979

Section: 13,13(1)(aa)(d)(e),58

Law: Gift Tax Act, 1958

Section: 2,4

(a) Income-tax Ordinance (XXXI of 1979)---S.13--Income-tax Officer has power to determine "deemed income" of assessee-Purchase sad sale of property by assessee-Consideration settled by parties in registered deed doubted to be understated and not in accordance with prevailing market price - Provisions of S. 13, held, empower Income-tax Officer to proceed in such matter to ascertain prevalent market value for "deemed income" of assessee--Mere fact that sale transaction was registered in itself does not render case to be immune from provisions of S. 13--Provisions of Evidence Act, 1872, Registration Act, 1908; Transfer of property Act, 1882, Stamp Act; 1899, held further, not applicable in extenso to proceedings under S.13, Income-tax Ordinance, 1979,--Income-tax Ordinance, 1979 being fairly distinguishable and independent legal fiction, held, difficult for civil law. Section 13 of Income-tart Ordinance, 1979 is parallel provisions of section 4(2-A) of the Repealed Income-tax Act, 19122. Provisions of section 13 is in the nature of substantive law providing for any addition on account of specific amounts of credits, investments or expenditure as envisaged therein unless linked with the suppressed profits of business or profession and is to be strictly made under this section and not under the other general provisions of the Ordinance. It merely restates the rule of evidence that because the assessee alone can explain certain facts and in case he offers no explanation or his explanation is unsatisfactory, an inference can be drawn against him for holding that the items represent his fictional income. Position of proceedings under Income-tax Ordinance, 1979, is fairly distinguishable as it is an independent legal fiction fairly different from civil law. Veracity of purchase price of an immovable property given in the title of the sale-deed is considered to be final under the civil law. Similar is the position under Registration Act, Stamp Act, Transfer of Property Act and Evidence Act. In the Income-tax proceedings, provision being of establishing credits, investments and expenditure is absolutely different from civil law. Provisions of Civil law and Evidence Act…

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