Law: Income Tax Ordinance, 1979

Section: 80C,50(5),156

Income Tax Ordinance (XXXI of 1979)].....Ss. 80 C, 50(5) & 156 Tax on income of certain contractors and importers Deduction of tax at source Sales tax and customs duty -Inclusion of in the value of imported goods for purpose of income tax deduction under S.50(5) of the Income Tax Ordinance, 1979 Validity -Sales tax and customs duty shall not be added in the value of imported goods for the purpose of assessing income of the assessee under S.80 C of the Income Tax Ordinance, 1979 Tax liability was to be worked out after deducting sales tax and customs duty paid by the assessee Appeal of the assessee was accepted by the Appellate Tribunal. Messrs Ramma Pipe and General Mills (Pvt.) Limited through its Director v. The Federation of Pakistan through Secretary, Ministry of Finance, Islamabad and 3 others 1994 PTD 848 and Writ Petition No. 18286 of 2001 rel. ORDER RASHEED AHMAD SHEIKH (JUDICIAL MEMBER), Vide these appeals the assessee appellant has assailed the combined order passed by CIT(A) Zone I, Lahore, dated 3 12 2001 in respect of the assessment years 1996 97 and 1997 98 whereby the Appeal Commissioner has maintained the rectificatory order passed by the DCIT under section 156 of the Income Tax Ordinance, 1979: The precise question which came up for our consideration was as to whether sales tax and custom duty shall be included in the value of goods imported for the purpose of collecting advance tax under section 50(5) read with section 80(c) of the Income Tax Ordinance, 1919 or not. 2. What happened in this case was that value of the imported goods was declared by the assessee after exclusion of sales tax and was accepted by the Assessing officer as such. This resulted into creation of refund in favour of the assessee. Subsequently it was noticed by the Assessing Officer that correct value of the imported goods was not declared by the assessee and this being a mistake apparent from record, a show cause notice in terms of section 156 of the Income Tax Ordinance, 1979 was issued whereby the Assessing Officer intended to modify the order by assessing value of the imported goods inclusive of sales tax and custom duty. The reply furnished was not acceptable to…

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