Income Tax Ordinance, 2001

CHAPTER-VIII

ANTI-AVOIDANCE

From: 2023-07-01 - To: 0000-00-00 111. Unexplained income or assets.- (1) Where – (a) any amount is credited in a person’s books of account; (b) a person has made any investment or is the owner of any money or valuable article; 1[***] (c) a person has incurred any expenditure 2[; or”] 3[(d) any person has concealed income or furnished inaccurate particulars of income including (i) the suppression of any production, sales or any amount chargeable to tax; or (ii) the suppression of any item of receipt liable to tax in whole or in part,] and the person offers no explanation about the nature and source of the amount credited or the investment, money, valuable article, or funds from which the expenditure was made 4[ suppression of any production, sales, any amount chargeable to tax and of any item of receipt liable to tax] or the explanation offered by the person is not, 5[in the Commissioner’s opinion, satisfactory- (a) the amount credited, value of the investment, money, value of the article, or amount of expenditure shall be included in the person’s income chargeable to tax under the head Income from Other Sources” to the extent it is not adequately explained; and (b) the suppressed amount of production, sales or any amount chargeable to tax or of any item of receipt liable to tax shall be included in the person’s income chargeable to tax under the head “Income from Business” to the extent it is not adequately explained] 6[:] 7[Provided that where a taxpayer explains the nature and source of the amount credited or the investment made, money or valuable article owned or funds from which the expenditure was made, by way of agricultural income, such explanation shall be accepted to the extent of agricultural income worked back on the basis of agricultural income tax paid under the relevant provincial law.] 8[(2) The amount referred to in sub-section (1) shall be included in the person’s income chargeable to tax: (i) in the tax year to which such amount relates if the amount representing investment, money, valuable article or expenditure is situated or incurred in Pakistan or concealed income is Pakistan-source; and (ii) in the tax year immediately preceding the tax…