Law: Income Tax Ordinance, 1979

Section: 59,2(12),27,SecondSched.

(a) Income tax Ordinance (XXXI of 1979)---S. 59 Assessee dealing in Mining of Silica Account books not maintained by assessee Lump sum addition in trading result Assessment order showing that while making lump sum additions and thereby evolving a higher rate of gross profit than the declared one, Income tax Officer had not cited any parallel case nor such additions appeared to have been made on any rational criteria Assessee though had history of rejection of accounts but mere history would not provide a sound basis for lump sum additions in the turnovers of assessee Income tax Officer while exercising his discretion should have carried out a proper inquiry to correctly ascertain extent of business and should have also obtained necessary data from Industries Department regarding size of Silica mines, lease period, average sate of production, average market rate of Silica sand etc. Such inquiry was all the more necessary because of withholding of books of account by assessee Lump sum additions in trading results, therefore, were not made on any .rational basis in circumstances Income tax Officer was advised to carry out independent inquiries in applying reasonable rate of profit, providing a proper opportunity to assessee to explain his point of view without being motivated of the passing remarks of Appellate Authority. (b) Income tax Ordinance (XXXI of 1979) Ss. 2(12), 27 & Second Sched. cl. (79) "Capital asset" Meaning Mining lease Whether a capital gain Transfer of mining lease being an immovable property, shall not be considered as a "capital assets" for exemption from tax under cl. (79), Sched. II to Ordinance, 1979 General Clauses Act (X of 1897), S. 3(25) Transfer of Property Act (IV of 1882), S. 105 Stamp Act (II of 1899), S. 2(16). Under clause (12) of section 2 of the, Income tax Ordinance, 1979, a 'capital asset means a property of any kid held, by the assessee'. Now the said property can be movable or immovable, except stock in¬ trade, consumable stores or raw material held for the purpose of business or profession, personal effects and agriculture 'land. Further, under clause 79) of Second Schedule to the Income tax Ordinance, 1979 (as it was before…

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