Law: Income Tax Ordinance, 1979

Section: 62,63,65,11,2(4),9

Law: Constitution of Pakistan, 1973

Section: 247,1(2),246

Income Tax Ordinance (XXXI of 1979)-------Ss. 11 & 9---Residential status of the assessee determines the total income with reference to S.11---Whenever the Income Tax Officer faces such eventuality, he has to first determine the status of the assessee for determination of his total income. I.T.A. No.1020/PB;1989 PTD (Trib.) 882 and 1989 PTD (Trib.) 835 ref.ORDER These are the six appeals filed by the department challenging the combined order, dated 12-8-1987 of the learned CIT (Appeals) for the charge years 1982-1983 to 1986-1987 and separate order, dated 18-6-1988 for the charge year 1987-1988 directing the ITO to take 20% of the payment arising in taxable territories as against 30% taken by the ITO and for amending the status of assessee in view of the pronouncements of ITAT in ITA No.1020(PB) dated 14-6-1986. The facts giving rise to these appeals are as follows: The assessee (hereinafter referred to as the respondent) is an individual deriving income from contracts of supply and carriage with Pakistan Army. In the past 30% of the payments were treated taxable as arising in taxable territories of Pakistan and remaining portions of payments were taken as payments relating to the areas where Income Tax laws had not been extended. In the returns of income for the charge years 1982-83 to 1984-85 percentage of taxable payments was reduced by the respondent to 9%. The ITO found the income as having been under assessed for the charge years 1982-83 to 1984-85, therefore, assessments were re-opened a/s 65. The respondent in compliance to notice a/s 65 filed the returns on 26-1-1986 declaring income as before. The respondent had kept no books of account and insisted for the acceptance of his returns showing 9% payment in taxable territories of Pakistan. He submitted the chart of income indicating areas covered during the course of transportation. The ITO did not accept the contention for the reasons that no record was kept and as per history of the case 30% of the payments were treated as taxable. The ITO took into consideration the overall business operation, i.e., location of the offices of paying authority, acceptance of tenders and partners…