Law:

Section: 148(7),153(1)(a),21(e)

(a) Income Tax Ordinance (XLIX of 2001)--- ---Ss.148 (7) & 153(1)(a)---Import---Payment for goods and services---Stray or isolated transaction---Sale of imported goods to sister concern without any value addition---Taxation Officer observed that goods were assessable under S.148(7) of the Income Tax Ordinance, 2001 under the Presumptive Tax Regime but no tax could be deducted as the taxpayer had been given a certificate of exemption for import of these items for its on use---Similarly, taxpayer was confronted regarding tax deduction on supply of locally purchased items without value addition and as considered by the Assessing Officer the same fell within purview of Presumptive Tax Regime as provided under S.153(1)(a) read with S.153(b) of the Income Tax Ordinance, 1979---Taxpayer contended that said transactions did not attract any tax liability as no profitability was involved as the same were transferred to related parties on cost price basis---Taxation Officer observed that transactions did not relate to stray or isolated transactions because there were 88 transactions in the year and had occurred with considerable regularity throughout the year---Tax liability was worked out under Presumptive Tax Regime under Ss.148(7) and 153(6) of the Income Tax Ordinance, 2001---Validity---Exemption certificate had been issued to the taxpayer by the department for import of such items for its own use but the same were sold to sister concerns at a later stage; it was misuse of the exemption certificate and the transactions taking place throughout the year with a considerable degree of regularity could not be considered as stray or isolated 'transactions'---Taxation Officer was justified to tax said sales in accordance with the provisions of law---First Appellate Authority misconceived the issuance of exemption certificate which had been issued by the department for import of goods for own use of the taxpayer---Order of First Appellate Authority was vacated and that passed by the Taxation Officer was restored by the Appellate Tribunal. (b) Income Tax Ordinance (XLIX of 2001)--- ----Ss. 148(7) &…