Law: Income Tax Ordinance, 1979

Section: 12,12(5),80,80AA

(a) Income-tax----Evidence---If the evidence produced by the assessee was not reliable in the opinion of Taxation Officer, then he should have recorded his reasons for the same indicating its infirmities or have discarded its probative value. (b) Income Tax Ordinance (XXXI of 1979)--- ----Ss.12(5) & 80AA---Income deemed to accrue or arise in Pakistan--Fee for technical services or reimbursement of cost---Burden of proof--Departmental officers had not discharged their onus and burden to establish that the payments made to the assessee constituted its income was not discharged---There was no material evidence in the assessment order which could be relied upon to hold that the payments made to assessee were fees for technical services in contrast to reimbursement cost as was claimed by the assessee---No evidence as opposed to claim of assessee had been brought on record despite specific request by the assessee during the assessment proceedings which fact had not been denied---If a receipt was not income, it could not be charged under S.12(5) read with S.80AA of the Income Tax Ordinance, 1979. (c) Income Tax Ordinance (XXXI of 1979)--- ----Ss.12(5) & 80AA---Income deemed to accrue or arise in Pakistan--Reimbursement of cost was treated as fee for technical services but no evidence was led in support of such treatment---Validity---Evidence proved that the assessee had received only re-imbursement---Departmental officer. failed to establish that the receipt of the assessee was the income, which was pre-requisite for charge of tax under S.12(5) of the Income Tax Ordinance, 1979---Departmental officer had not brought anything on record to suggest that the receipt had the character of income or it had accrued during the year under consideration or it fell within the definition of fee for technical services---Evidence was available on record that the payments received by the assessee were mere re-imbursement of certain costs and did not fall under the definition of 'income'---Assessment was not sustainable in law which had rightly been annulled by the First Appellate Authority. Messrs Tapal Energy (Pvt.)'s case 1997 PTD 1555 and 1991 PTD 999 rel. ORDER The…

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