I.T.As. Nos.2951/LB and . 2952/LB of 1995, decided on 9th February, 2002 VS I.T.As. Nos.2951/LB and . 2952/LB of 1995, decided on 9th February, 2002, 2002 PTD-INCOME-TAX-APPELLATE-TRIBUNAL-PAKISTAN 2285 (2002)

Income Tax Ordinance (XXXI of 1979)‑‑‑

‑‑‑‑Ss.11. 2(44), 13, 62, 63 &‑ 59(1)‑‑‑Total income ‑‑‑Scope‑‑ Assessment on production of accounts, evidence etc. ‑‑‑Self‑assessment‑‑ Total audit‑‑‑Declaration of capital by availing benefit provided by Self‑Assessment Scheme‑‑‑Probe‑‑‑Assessment‑‑‑First Appellate Authority cancelled the order with direction that capital declared by the assessee could not be probed‑‑‑Validity‑‑‑Once a case was selected for total audit the provisions of Income Tax Ordinance, 1979 including its Ss.62 & 63 of the Ordinance came into operation‑‑‑Under S.62 of the Income Tax Ordinance, 1979, the Department was to assess the "total income" and "total income" includes income from all sources‑‑‑Section 2(44) of the Income Tax Ordinance, 1979 defines total income `and S.11 defines the scope of total income and once an assessee is selected for normal assessment in consequence to the selection for total audit, the provisions of S.11 of the Income Tax Ordinance., would apply ‑in all fours‑‑Department had rightly invoked the provisions of S.13 of the Income Tax Ordinance, 1979, as the assessee could not explain the sources of the capital employed in business‑‑‑Appellate Tribunal directed the Assessing Officer to give a chance to the assessee to review his claim regarding capital as he had shown the figure‑ of capital to avail the benefit provided by Self‑Assessment Scheme and once he was deprived of the same, he should also be allowed to review his claim‑‑‑Matter was set aside with the direction that Assessing Officer shall allow the assessee redetermine his claim regarding capital‑‑‑If the assessee still insists upon the amount of capital/wealth he had shown earlier, the Assessing Officer shall be at liberty to assess the same keeping in view the sources and explanation filed by the assessee in support thereof.

I.T.A. No.3074/LB of 1995 rel.

Muhammad Asif, D.R. for Appellant.

M.A. Malik, F.C.A. for Respondent.

Date of hearing: 8th February, 2002.

ORDER

KHAWAJA FAROOQ SAEED (JUDICIAL MEMBER).‑‑‑These appeals are filed by the Department against the order of the A.A.C. The issue involved is directions to accept the capital declared by the assessee.

The learned D. R. says that once a case is selected for total audit the provisions of Income Tax Ordinance including 62, 63 etc. come into operation. He said that under section 62 the Department is to assess the total income and total income includes income from all sources. He referred section 2(44) that defines total income. He also referred section 11 that defines scope of total income. He remarked that once an assessee is selected for normal assessment in consequence to the selection for total audit, the provisions of section 11 apply on all fours. The Department, therefore, had rightly invoked the provisions of section 13, as the assessee could not explain the sources of the capital employed in business.

Learned A.R. firstly supported the order of the First Appellate Authority. fie was pointed out that the Tribunal has already decided this issue to which he conceded that he is aware of the finding and produced before the Bench an earlier order on the subject. He, however, said that there is still an exception to the findings in the manner that selection of the case for total audit does not mean that the case is excluded from the scheme. Even a selected case remains a part of the scheme and thus application of section 62 is in the same context. The argument is quite surprising. In our opinion learned D.R. is quite justified in saying that once a case is excluded, it is excluded for all purposes. Even if one goes by the arguments of learned A.R. that after exclusion of the case from the scheme, the case shall be assessed under section 62 or 63 as the case may be, section 62 speaks of the total income. We, therefore, do not agree with the First Appellate Authority to the extent of his direction that the capital declared by the assessee cannot be probed and therefore, cancel the order to this extent. Conversely and following our judgment produced by learned A.R. we direct the Assessing Officer to give a chance to the assessee to review his claim regarding capital. Assessee has shown the figure of capital to avail the benefit provided by S.A.S. and once he is deprived of the same, he should also be allowed to review his claim. The matter, therefore, is set aside with the directions that Assessing Officer shall allow the assessee to re‑determine his claim regarding capital. If the assessee still insists upon the amount of capital/wealth he has shown earlier, the I.T.O. shall be at liberty to assess the same keeping in view the sources and explanation filed by the assessee in support thereof. The departmental appeal, therefore, stands accepted subject to the directions given by us above and in I.T.A. No.3074/LB of 1995; decided on 13‑11‑1998.

Order accordingly

M. B.A./341/.Tax(Trib.)Appeal accepted