Law: Income Tax Ordinance, 1979

Section: 136,136(2)

Income Tax Ordinance (XXXI of 1979)----S. 136(2)---Questions referred relating to factual controversy---High Court declined to answer such questions. ORDER Assessee derives income from salary as director of a private limited company. A liability, in his wealth tax statement for the year 1988-89, was shown to the tune of Rs.14,74,000. The amount was shown to have been received from prospective vendee, on behalf of co-director. Vendee statedly paid the amount as sale consideration of shares, belonging to co-director. ITO held that the amount is unexplained and tracked it as deemed income under section 13(1) of the Income Tax Ordinance, 1979 (now repealed). The appeal against the order met the same fate and CIT (Appeals) through order, dated 30-9-1991, upheld the decision of ITO. Learned Tribunal while deciding the second appeal of assessee, vide order, dated 26-12-1993 observed there was a written agreement between the assessee and Messrs Pioneer Alliance Corporation Ltd. Corporation, sale transaction was concluded inter se the parties and the assessee had a valid authority through written instrument on behalf of shareholders of Messrs Big Mac Food Industries Limited to complete transaction. It was also observed that ITO has not verified either from Messrs Pioneer Alliance Corporation Ltd. who advanced money or from the shareholder of Messrs Big Mac Food Industries Limited on whose behalf the transaction was carried by assessee. Learned Tribunal after considering the above facts, held that, impugned addition is imaginary and the same deleted. 2. The instant reference has been filed to consider following questions, for our opinion. (i) Whether on the facts and in the circumstances of the case the learned Tribunal was right in deleting the addition of Rs.14,74,000 made under section 13(1) of the Income Tax Ordinance, 1979 and admittedly not shown in the Wealth Statements by the creditors. (ii) Whether on the facts and in the circumstances of the case the Tribunal was justified in holding that, the addition under section 13(1) of the Income Tax Ordinance, 1979 was beyond the ambit and scope…

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