Law: Income Tax Ordinance, 1979

Section: 27,28;SecondSched.,

(a) Income-tax--- ----Commission receipt---Excessive estimation---Rejection---Reduction by First Appellate Authority---Realistic approach--- Sufficient reasons were given by the Assessing Officer in rejecting the book version and he, had estimated receipts as in the past---Receipts had, however, been estimated excessively by the Assessing Officer which were realistically reduced by the First Appellate Authority which was upheld by the Tribunal. (b) Income-tax--- ----Profit and Loss expenses---Verifiability---Addition maintained by the First Appellate Authority---Validity---Appellate Tribunal set aside the additions maintained by the First Appellate Authority to meet the ends of justice for re-examination by the Assessing Officer and directed the Assessing Officer that no addition shall be made if the expenditure was found to be verifiable and relatable to the business. (c) Income Tax Ordinance (XXXI of 1979)---Ss. 27 & 28; Second Sched., Part I, Cl. (65)---Capital gain--­Adventure in the nature of trade---Shop was booked to be used as branch without transfer of title---Subsequently, another property was acquired for such purpose and shop was disposed of---Gain from such transaction was declared as `capital gain'---Assessing Officer treated such transaction as `adventure in the nature of trade' and amount declared as capital gain was taxed as business income and First- Appellate Authority directed to accept the same as capital gain---Validity---Capital gain arose on transfer of capital assets and capital asset did not include immovable property---If the gain had arisen on a shop ("immovable property"), then such gain was not to be calculated as capital gain under Ss. 27 & 28 of the Income Tax Ordinance, 1979---Declaration of the amount as capital gain was against law---Assessing Officer also misdirected himself by treating such single transaction as venture in the nature of trade---Title over the shop had not been transferred to the assessee and in the balance sheet the amount so invested was being shown as advance---Such amount was return on advance and such income likely to be calculated as income from other sources---Even if it was a casual receipt,…

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