Law: Income Tax Ordinance, 1979

Section: 65,136,136(1)

Income Tax Ordinance (XXXI of 1979)----Ss. 65 & 136(1)---Re-opening of case of assessee (firm) having maintained two Bank accounts in its partner's name---Assessing Officer treated deposits in Bank as sales for each year---Reopening of case was upheld by Appellate Authority, but was found by Tribunal not justified as Assessing Officer could not establish benami nature of accounts either before or after re-opening of the case---Validity---Tribunal had not ruled upon evidentiary value of telegraphic transfer in Bank account operated by partner of firm--Whether a particular fact in the case of assessee would amount to a definite information, was predominently a question of fact---Tribunal had not connected two Bank accounts with the firm---If benami nature of accounts was accepted, still transaction completed therein could at best be taken into account of individual partner and not in the hands of the firm---In absence of establishment of direct link between assessee (firm) and accounts allegedly operated upon by one of its partners transaction effected therein could not be considered to be a part of business of firm---High Court declined to answer the question. ORDER NASIM SIKANDAR, J.--This is a reference made by the Income Tax Appellate Tribunal, Lahore Bench Lahore under section 136(1) of the late Income Tax Ordinance, 1979. Following question of law is stated to have arisen out of their order, dated 8-5-1996:- "Whether on the facts and circumstances of the case the transaction in the form of telegraphic transfer (TT) reflected in the Bank statement operated by the partner of the firm can be defined as definite information and substantial evidence to proceed the case under section 65 of the Income Tax Ordinance, 1979?" 2. The respondent-assessee is a registered firm and derived income, at the relevant time, from running a flour mill. For the assessment year 1982-83 in its respect assessment was completed under section 62 of the Ordinance, 1979. For the other years involved viz. 1980-81 to 1985-86 the assessments were completed under Self-Assessment Scheme. Subsequently on receipt of an information that assessee-firm was maintaining two bank accounts in the…

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