Law: Income Tax Ordinance, 1979

Section: 12(12),13(2)

[Income Tax Ordinance (XXXI of 1979)]....Sections 12(12) & 13(2)...Verifiable transaction, discarding of...Effect...Assessing officer was, not empowered to ignore the sale price in case of verifiable transaction unless it was proved to be sham or of collusive and corroborative nature to deprive exchequer of its lawful dues and taxes... Principles. ORDER ARSHAD SIRAJ MEMON, J.---This income tax appeal arises out of the order passed by the Income Tax Appellate Tribunal in I.T.A. No.549/KB-1988-89 dated 10-4-1997 for the assessment year 1987-88. By order dated 10-2-1999 this Court had admitted this Income Tax Appeal to consider the following question:-- "Whether the estimate of sale/purchase price of the plot in dispute made by the Appellate Tribunal is not based on any evidence and material on record but on the conjecture and whims of the Appellate Tribunal." 2. We have heard Mr. Muhammad Farid, learned Advocate for the appellant and Mr. Jawaid Farooqui, learned Advocate for the respondent. 3. Brief facts of the case are that the appellant is a registered firm which had purchased a plot of land No.FL-9 Block-2, Clifton, Karachi during the assessment year 1986-87, which was sold during the assessment year under consideration i.e. assessment year 1987-88 to Messrs Sassi (Pvt.) Limited for consideration of Rs.1,000,000 vide sale-deed, dated 4-1-1986. 4. During assessment proceedings it was noted by the Income Tax Officer that he received a verification note from Deputy Director (Survey), Karachi, regarding the said transaction of the appellant/ assessee with Messrs Sassi (Pvt.) Limited and in the said verification note it was revealed that fair market value of plot for flat site ranges between Rs.1200 to Rs.1500 per sq. yard in the same locality. It appears that on the basis of the said verification note, the appellant was confronted' during the course of the proceedings that in same vicinity commercial plot 7/8 in Block No. II Clifton; Karachi was sold on 12-9-1985 by National Construction Limited at Rs.1,970 per sq. yard and on assumption that prices must have gone up, intention was shown to estimate the said plot at Rs.2000 per sq. yard. In response to the…

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