Law: Income Tax Ordinance, 1979

Section: 59

Income-tax Ordinance (XXXI of 1979)--S. 59--Self-Assessment Scheme (1984-1985), para. 6(c)--Claim of immunity under para. 6(c) of the Scheme-Requirements--Partnership Firm of two partners-- Dissolution-- Income of remaining individual of such firm it subsequent year-- Comparison of income of individual with last assessed income declared by the Firm (before dissolution) on the basis of turnover/ receipts in order to see if the two bear the same proportion as their receipts/ turnover bear inter se--Assessee having worked in the capacity of an individual, income received by him held, could be compared to that he received as a partner and it was not comparable to the income of the firm. ORDER MUHAMMAD AZAM KHAN (JUDICIAL MEMBER).--The assessee by this appeal regarding charge year 1984-85, is objecting to the order of learned A.A.C. dated 17-12-1985, by which his plea of immunity of the case to be subjected to detailed scrutiny was rejected. The relevant facts briefly stated are that the assessee was a partner of a firm, along with a lady named Fiza Bano. As such he declared his share income from the firm for 1983-84 at Rs.9,050/which was accepted. Later the firm suffered dissolution, the lady partner, Fiza Bano, leaving the firm with her share of capital. As a result the assessee became sole proprietor and took over the business as individual continuing to deal in the same goods (hosiery) as before. As an individual for this year he submitted his return. He showed 20% increase over his last assessed income and claimed immunity admissible under the SAS. He disclosed income as under:- Sales Rs. 2,60,000 Gross Profit Rs. 20,000 G.P. rate 8% Less expenses Rs.26,26,000 Balance net income Rs. 18, 200 Comparing the above income with his share income for 1983-84 From the firm as a partner, his case appeared to qualify for immunity, but the ITO for comparison did not adopt his share 'income. Instead he took income of the firm based on turnover/ receipts for comparison. That income did not bear, the required ratio to the income declared for this year. Accordingly, he processed the case through detailed scrutiny. Aggrieved, the assessee preferred an appeal which having…

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