Law: Income Tax Ordinance, 1979

Section: 13(1)(d)

Income Tax Ordinance (XXXI of 1979)----S.13(1)(d)---Addition---Deemed income---Addition under S.13(1)(d), Income Tax Ordinance, 1979 was made by the Assessing Officer on the ground that assessee had understated the consideration paid for the acquisition of property by him---Assessing Officer had not stated whether the assessees income during the year did or did not justify the acquisition of the property--¬Assessee also had not offered reasonable explanation regarding the source to acquire the property---Held, where an acquisition of property was made by registered deed ordinarily the consideration evidenced by the sale-deed should be accepted as the value of the property by the tax authorities unless they could prove that the consideration stated in the deed was too low and the assessee had acquired the property by expending more money---Income Tax Appellate Tribunal, in circumstances, set aside the orders of Tax Authorities relating to addition under S.13(1)(d) .of .the Ordinance with the direction that the Assessing Officer shall redecide the issue whether or not the assessees income justified the acquisition of the property of the consideration mentioned in the sale-deed including acquisition charges. ORDER CH. IRSHAD AHMAD (JUDICIAL MEMBER).---The assessee, an individual, derives income from dealings in rubber items. In his return of income filed under the Self-Assessment Scheme for the assessment year 198586 the assessee declared his income at Rs.20,000. The return was, however, selected for detailed scrutiny through random ballot. The wealth statement filed by the assessee alongwith the return showed that the assessee had made an investment of Rs.50,000 in the form of acquiring one half share in a shop. The Income Tax Officer, however, was of the view that the value of the share in the shop acquired by the assessee was equal to Rs.81,000 which included incidental charges of acquisition. Accordingly, the I.T.O. made an addition of Rs.81,000 to the income of the assessee treating the value of the share in shop as deemed income under section 13(i)(d) of the Income Tax Ordinance, 1979. The assessees appeal was also rejected by the AA.C. Through this further…

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