Law: Income Tax Ordinance, 1979

Section: 79

Law: Customs Act, 1969

Section: 25(4)(5)

Income Tax Ordinance (XXXI of 1979)----S.79---Customs Act (IV of 1969), S.25(4)(5)---Income from transactions with non-residents---Export---Trading account---Addition---Assessing Officer made addition in trading account on account of difference in declared selling rate and the rate adopted by the Custom Authorities for assessment of export duty which was confirmed by First Appellate Authority ---Assessee contended that remittances received were verifiable and valuation was done under S.25, Customs Act, 1969 on a hypothetical basis and not on actual price---.Validity---Criteria for application of S.25, Customs Act, 1969 was that the seller and the buyer could be "deemed to be associated in business with one another" and so was the criteria under S.79, Income Tax Ordinance, 1979 for determining the amount of profits which would have accrued to the resident but, by reasons of making or imposing conditions between them in their financial transactions which differed from those which would be made between independent persons; had not so accrued---No appeal was filed against valuation by the Custom Authorities---Impugned order was confirmed and appeal was dismissed by the Tribunal. ORDER S. M. SIBTAIN (ACCOUNTANT MEMBER).---Objections are taken in this appeal to the order of the learned C.I.T.(A) for upholding the rejection of trading A/c. and .addition of Rs.6,888,698 in molasses export account made for the alleged difference in the declared .selling rate and the rate adopted by Custom Authorities for assessment of export duty, for maintaining the disallowance of Rs.4,48,317 out of expenses claimed in storage account and for setting aside the order on charging WWF instead of deleting it. 2. Objections taken to setting aside of addition of Rs.416,740 in sugar account and maintaining the add backs out of various expenses claimed in the P&L A/c. are not pressed by Mr. Arshad Siraj, the learned counsel of the appellant: hence appeal dismissed on these grounds is not pressed. 3. We have heard the learned representatives of the two parties. 4. The appellant, a registered firm, is engaged in the business of molasses export, trading of sugar besides undertaking handling…

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