Law: Income Tax Ordinance, 1979

Section: 13&88&80C(5)readwishThirdSched.,R.3(2),2 3,24

(a) Income Tax Ordinance (XXXI of 1979)---Ss. 13 & 80-C (5)---Deemed income---Addition---Presumptive tax --¬Validity---Assessee returned income worked out under normal law--¬Assessing Officer relying upon S.80-C(5) read with S.13(l) (aa) of the Income Tax Ordinance, 1979 assessed income on his own---Difference of both returned and assessed incomes was added back---Held, S.13, Income Tax Ordinance, 1979 comes into play only when any credit had been detected and assessee was required to explain, but in the instant case S.80-C(5) of the Ordinance had been made function of calculation which was not in consonance with letter and spirit of law---Assessing Officer had detected nothing---Income-tax Officer worked out income imputable to supplies taxable under S.80-C and charged them to tax under S.13---Such action was beyond scope of S.80-C(5) and amounted to putting cart before horse---Sales and purchases were accepted by ,Assessing Officer---Neither inflation in expenses nor suppression of any item of income was suspected by Assessing Officers---No hint of unexplained income was given on record--¬Section 13 was invoked in round about manner---Assessing Officer applied S.80-C(5) on basis of notional figure---Addition under S.80-C(5) read with S.13 was thus ordered to be deleted. (b) Income Tax Ordinance (XXXI of 1979)--- ----Ss.23 & 24---Addition---Disallowance of expenses for provision of pension in anticipation of privatization---Assessee objected to provision of pension in anticipation of privatization--Provision was based-on actual valuation for meeting pension obligation on impending privatization---Held, provision for meeting obligations which may or may not arise was held to be inadmissible---Added amount in question would indeed be admissible as and when privatisation took place. (c) Income Tax Ordinance (XXXI of 1979)--- --.-Ss.88 & 80-C (5) read wish Third Sched., R.3(2)- -Addition---Shift depreciation allowance---Assessing Officer allowed extraordinary shift depreciation allowance with reference to member of days daring which machinery had been in operation---No exception could be taken to such course. (d) Income Tax Ordinance (XXXI of 1979)---…

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