Law: Income Tax Ordinance, 1979

Section: 12,12(7),136(1)

Income Tax Ordinance (XXXI of 1979)---Ss. 12(7) & 136(1)---Income deemed to accrue and arise in Pakistan-­Transfer of stock and store to a sister concerned by the assessee--­Addition of notional interest on such transfer treating as loan or advance---Appellate Tribunal deleted such addition made under S.12(7) of the Income Tax Ordinance, 1979---Reference to High Court--­Validity---Provision of S.12(7) of the Income Tax Ordinance, 1979 clearly refers to "any loan or advance" on which no interest had been charged---Tribunal rightly found that it was only notional interest and not being real it had to be restricted to only loans and advances---Neither any loan nor any advance was made by the assessee to its sister concern-­Tribunal; while stating the case attempted to raise a new issue which it fact was never mooted before it----Assessee tried to introduce another mixed question of law and fact to the effect whether the amount debited in the manner as in the case of the assessee could be treated as loans and advances as referred to in the provision of S.12(7) of the Income Tax Ordinance, 1979---Such aspect having never been considered by' the Tribunal could not be said to have arisen out of its order---Even the Assessing Officer did not raise said issue. and till the stage of the Tribunal, the factual findings remained consistent that it was a transfer of stock and stores and was not a loan or advance as such---High Court answers a Reference only on the facts as found by the Tribunal--­Controversy raised subsequently on Reference application could not be taken up for consideration---Transfer of stock and stores was neither loan nor advance, therefore, the answer to the question as to whether Tribunal was justified in deleting the addition made by the Assessing, Officer under 5.12(7), of the Income Tax Ordinance, 1979 had to be in the affirmative. ORDER NASEEM SIKANDAR, J.---This is a case stated by the Lahore Bench of the Income Tax Appellate. Tribunal, at the instance of the Commissioner of Income Tax, Companies, Lahore. The following question has been framed for our consideration and answer:--- "Whether on the facts and in the circumstances of the case, the…

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