Law: Income Tax Ordinance, 1979

Section: 13,7,4

Law: Income Tax Rules, 1982

Section: 39(4)(b)(1)(aa)

(a) Income-tax Rules, 1982-- ---K. 39(4)(b)(1)(aa)--Use of company's car for personal use by Director of Company--Addition to assessee's income for use of such car--Assessing Officer, held, was duty bound to call for an explanation of assessee as to whether he was using company's car wholly for his personal and private use before making such addition. (b) Income-tax Ordinance (XXXI of 1979)---Ss. 13 & 7--Deemed income--Unexplained investment--To determine as to whether such investment was income of the assessee, it was tile opinion of Assessing Officer which was material--Opinion of Assessing Officer, however, was subject to the opinion of Inspecting Assistant Commissioner who may either approve it or suggest any modification in it or may even direct the Assessing Officer to re-frame his opinion after making additional enquiry. 1986 P T D (Trib.) 578 applied. (c) Income-tax Ordinance (XXXI of 1979)-- ---Ss. 13 & 4--Deemed income--No explanation by assessee--Addition under S. 13--Prior approval of Inspecting Assistant Commissioner Procedure involved stated. The Legislature has taken the precaution that the Inspecting Assistant Commissioner should remain involved in the assessment proceedings. This conclusion is further fortified by the requirement of two approvals as envisaged by section 13(1) and section 13(2) of the Ordinance. An Income-tax Officer is firstly required to ask an assessee to show cause as to why an addition should not be made under section 13 of the Ordinance according to the facts and circumstances of each case which is contemplated in clauses (aa) to 7(e) of section 13(1) of the Ordinance. When such explanation is offered to him, he should form his opinion on the basis of the material available to him and the explanation offered and if he comes to the conclusion that an addition should be made, he should seek the approval of his Inspecting Assistant Commissioner. Here the law requires him to offer his proposal regarding quantum of addition so that Inspecting Assistant Commissioner may scrutinise it in the light of the explanation. It appears from perusal of subsection (2) that if the Inspecting Assistant Commissioner agrees to the proposal of…

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