COMMISSIONER OF INCOME-TAX, COMPANIES, LAHORE VS PUNJAB COOKING OIL LTD., LAHORE
2001 PTD 2161
[Lahore High Court]
Before Nasim Sikandar and Jawwad S. Khawaja, JJ
THE COMMISSIONER OF INCOME‑TAX, COMPANIES, LAHORE
Versus
PUNJAB COOKING OIL LTD., LAHORE
C.T.R. No.5 of 1994, decided on 20/02/2001.
Income Tax Ordinance (XXXI of 1979)‑‑--
‑‑‑‑S.13(1)(d)‑‑‑Deemed income‑‑‑Addition‑‑‑Two separate and independent approvals of the I.A.C. for making additions to the declared income of the assessee were necessary at the relevant time.
Shafqat Mehmood Chohan for the Revenue.
Muhammad Iqbal Khawaja for Respondent,
ORDER
NASIM SIKANDAR, J.‑‑‑This is a case stated by the Lahore Bench of the Income‑tax Appellate Tribunal. The following questions of law has been framed for our consideration and reply:‑‑
"Whether on the facts and circumstances of the case the learned Income‑tax Appellate Tribunal justified in confirming the order of the learned CIT(A) by deleting the addition of Rs.5,27,000 which was made under section 13(1)(d) of the Ordinance?"
2. The facts in brief are that respondent is a manufacturer of cooking oil, during the period relevant to the assessment year, 1988‑89, purchased a piece of land declared at Rs.2,063 per kanal. The Assessing Officer finding the same to have been understated proceeded to estimate it at Rs.33,000 per kanal. In this manner an amount of Rs.5,27,000 was added towards income under clause (d) subsection (1) of section 13 of the Income Tax Ordinance. The learned first appellate authority by relying upon a judgment of the Tribunal found that the addition was made without adopting the required procedure under section 13 of the‑ Ordinance which included obtaining of two statutory approvals of the I.A.C. The learned Tribunal, on further appeal, upheld the findings recorded by the learned first appellate authority.
3. After hearing the learned counsel for the parties, we are of the view that the answer to the proposed question has to be in the negative. In a recent judgment a Division Bench of Karachi High Court in re: CIT v. Muhammad Kasim (2000 PTD 280) observed that the comparable provision of section 4(2‑D) of the Act postulated two separate and independent approvals of the I.A.C. for making additions to the declared incomes.
4. Being in respectful agreement with the finding recorded by our learned brothers we hold that the two statutory approvals at the relevant time were necessary for making the impugned addition of deemed income.
5. Answered accordingly.
M.B.A./C‑69/LAnswered accordingly.