Income Tax Ordinance (XXXI of 1979)---

----S. 65---Additional assessment---Definite information---Profit and loss account---Re-opening of assessment---Assessment was finalized under Self Assessment Scheme ---Assessee claimed less expenses of electricity bills in profit and loss account than the actual ones---Assessment was re-opened considering the same, a piece of evidence amounting to "definite information"---Validity---Law required a piece of information covered under the term "definite information" which leads to believe that income of the assessee had either escaped assessment or had been under assessed---Lesser claim of expenditure may be a piece of evidence but it did not give the impression that the income of the assessee had either been under assessed or escaped assessment---Assessment re-opened under S.65 of the Income Tax Ordinance, 1979 was considered to be without legal justification and the same was cancelled by the Appellate Tribunal.

1998 PTD (Trib.) 973 and I.T.A. No. 1726/LB of 1998 ref.

Shahid Abbas for Appellant.

Mrs. Talat Altaf, D.R. for Respondent.

Date of hearing: 13th May, 2000.

ORDER

KHAWAJA FAROOQ SAEED (JUDICIAL MEMBER).---Re opening of assessment is being challenged. As an alternative plea the estimate and partial modification in sales is also being assailed.

2. Brief facts on record are that assessee return was accepted under self-assessment scheme. Later it appeared that assessee had claimed expenses amounting to Rs.10, 188 on account of electricity while his actual bills were Rs.15,758. It was considered to be a piece of evidence amounting to definite information and the case - was re-opened and subsequently assessed. The assessee argument before first appellate authority and before us with lessor claim-of an expenditure may be a piece of evidence but it did not give the impression that the income of the assessee has either been under assessed or escaped assessment in any manner. If the assessee had claimed more expenses; income would have been reduced. He, therefore, placed reliance upon 1988 PTD (Trib.) 973 and ITA No. 1726/LB of 1998 order dated 3-12-1998 wherein the Tribunal has held that such an information is surely a piece of evidence which results in decreasing income by a certain amount and thus, it does not give justification for reopening of assessment. Further, the Tribunal said that the relevant clause of the voice under which the assessment is re-opened must also be ticked. Both flaws exist in the present notice, the learned A. R. remarked.

3. The learned D.R., however, said the amount not disclosed attracts the provision of section 13, which presupposes concealment and thus, section 65 comes into operation. We do not consider the arguments of learned DR to be valid one. The issue before us is re-opening of the assessment, which has already been finalised by the department. The law requires a piece of information covered under the term definite information, which leads to believe that the income of the assessee has either escaped or under assessed. Had the assessee claimed more expenses the result would have been decrease in income and not enhancement. This situation is not covered under section 65. The result of above discussion is that the re opening is considered without legal justification. The same is, therefore, cancelled.

4.Since we have already decided the case in favour of the assessee the alternative plea needs no separate adjudication:

5.Order accordingly.

C: M. A./M.A.K./33/Tax(Trib.)Order accordingly.