Law: Income Tax Ordinance, 1979

Section: 13(1)(e)

ORDER SYED NADEEM SAQLIAN, JUDICIAL MEMBER.- Captioned appeal pertaining to the assessment year 1997-98 has been directed at the instance of the assessee/appellant calling in question the impugned order dated 27-04-2004 passed by the learned CIT (A), Multan. Following grievances have been urged through grounds of appeal, which are as under: i) "That an aggregate amount of Rs.20,97,320/- was received by the Appellant on conversion/encashment of foreign currency (U.S. Dollars). Since a foreign currency account was being maintained and the amounts in question were drawn from Bank on different dates. Evidence including Bank Statement was produced hence there was no justification to make any addition u/s 13(1)(e) treating the same as un-explained source. ii) That the learned CIT (Appeals), Multan was not justified at all to maintain the said addition u/s 13(1)(e). iii) that undoubtedly cognizance drawn by the Assessing Officer regarding un-explained source was inadvertent but yet in that case, provisions of section 13(1)(aa) were applicable whereas the learned Officer inadvertently invoked section 13(1)(e). iv) That the total amount of expenses was declared by the Appellant at Rs.2247803/-. Whereas addition on this account has been made amounting toRs.20,97,320/- meaning thereby that amount of foreign currency, encashment has been added instead of amount of expenses. v) That there was no material evidence available on record to infer that said encashments were remitted to any other country instead of utilizing the same for expenses. Thus the contention of the Assessing Officer in this regard is based on conjectures and surmises only. vi) That there was no reason, basis or justification to make any addition u/s 13 in the presence of solid evidence regarding encashment of foreign currency. Thus the addition made by invoking irrelevant provision of law was not sustainable at all. The learned CIT (Appeals), Multan arbitrarily upheld the same. vii) That no Notice u/s 13(2) was issued which was a sine-qua-non." 2. Succinctly, the facts relevant for the disposal of present appeal are that the assessee is an individual derived income from three sources i.e. salary as…

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