Law: Income Tax Ordinance, 1979

Section: 30,31

Income Tax Ordinance (XXXI of 1979)---Ss. 30 & 31---Income from other sources---Shop on lease ---Non -acceptance of lease arrangement on the ground that the same was collusive arrangement between the family as the, same was not registered---Business of local sale and purchase was assessed in the hands of assessee---Validity---Presumption was that such arrangement was to avoid heavy taxation---Held, assessee could not be deprived of such, an arrangement through mere estimates or surmises---Something stronger, was required to counter such presumption as the allegation of mala fide could not be attributed just by the words of mouth---Assessment should be made treating the assessee as a lease income holder under S.30 of the Income Tax Ordinance, 1979 against which he shall be entitled to allowable expenditure under S.31 of the Income Tax Ordinance, 1979---Appeal was accepted to the extent of leasehold arrangement and regarding claim of expenses, the same were set aside by the Appellate Tribunal. ORDER Following grounds have been taken up for adjudication for both the years:-- Assessment year 1999-2000: (1) That the CIT(A) was unjustified to dismiss the appeal without going into the merits of the case, hence the order of the CIT(A) is void ab initio and illegal. (2) That the DCIT/W. Tax has wrongly rejected the lease arrangement without any solid reason, hence illegal. (3) That the estimation of sales at Rs.28,00,000 is without any substance, hence, illegal, as there is no sales in this year except lease receipts of Rs.180,000. (4) That the DCIT/W. Tax has framed assessment at net income of Rs.570,000 without issuance of any notice under section 62, hence the assessment is void ab initio and illegal. (5) That the disallowance of P&L expenses Rs.10,000 is also without any basis, hence, illegal. Assessment year 2000-2001 (1) That the CIT(A) was unjustified to dismiss the appeal without going into the merits of the case, hence the order of the. CIT(A) is void ab initio and illegal. (2) That the CIT/W. Tax has wrongly rejected the lease arrangement without any solid reason, hence illegal. (3) That the estimation of sales at Rs.30,00,000 is without any substance,…

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