Law: Income Tax Ordinance, 1979

Section: 13,13(1)(d)

(a) Income Tax Ordinance (XXXI of 1979)-----S.136---Reference to High Court---Question of law or , fact--­Determination---Tribunal maintained rejection of accounts as made by the Assessing Officer and upheld by Commissioner of Income-tax (Appeals) on the ground that the defect of unverifiability of debit side of trading account could not be demolished even before them---In absence of real challenge to such findings of fact, same did not raise any legal controversy. Printers Combine (Mercantiles) v. C.I.T. 1984 PTD 229 and C.I.T. Companies-III v. Krudd Sons Ltd. 1994 SCMR 229 ref. (b) Income Tax Ordinance (XXXI of 1979)--- ----S.136---Reference to High Court---Question of fact---Estimation of cost of construction by the department as against the declared version could hardly be said to have given rise to a legal controversy to be resolved by the High Court. (c) Income Tax Ordinance (XXXI of 1979)--- ----S.13(l)(d)---Deemed income---Addition---Directors of assessee-company had transferred the land to the company at cost and evident intention appeared to be the allotment of shares of its value to them ---Assessee­ company had not yet started any business nor had paid any sale price for the land in question though subsequently shares of the equivalent value appeared to have been allotted---Revenue claimed and the Tribunal agreed that declared value of the property was not binding upon the Assessing Officer-­Validity---Assessing Officer, however, totally lost sight of the fact that under the provision of S.13(1)(d), Income Tax Ordinance, 1979 an addition could be made only if the assessee had made investment or was found in respect of any such year to be the owner of any valuable article and the amount expended on making such investment exceeded the amount recorded in that behalf in the books of account maintained by the assessee---Tribunal, therefore, was not justified in confirming the addition made under S.13(1)(d) of the Ordinance on account of lowness of cost of purchase of land discarding the assessee's plea that the Directors had sold the land at cost. There was no doubt that the addition in land account was totally unjustified and against law. The Directors…

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