I.T.A. No.2729 /LB of 2005, decided on 1st June, 2006. VS I.T.A. No.2729 /LB of 2005, decided on 1st June, 2006., 2006 PTD-INCOME-TAX-APPELLATE-TRIBUNAL-PAKISTAN 2688 (2006)

Income Tax Ordinance (XXXI of 1979)---

----S. 13(1)(aa)---Addition---Setting aside---Opportunity to fill in the lacunae in the assessment---Assessment' was set aside after giving clear observations that estimation of receipts was without any logic or convincing basis---Likewise the addition in the trading account was without any basis and the disallowances out of Profit and Loss expense had been made without giving reason for the disallowance under each of head of account---Matter had been set aside for de novo proceedings affording the Taxation Officer an opportunity to fill in the lacunae in the assessment order which had never been approved by the Appellate Tribunal as well as higher forums---Order of First Appellate Authority was vacated by the Appellate Tribunal and declared version of the assessee was directed to be accepted.

Muhammad Shahid Abbas for Appellant.

Mrs. Sabiha Mujahid, D.R. for Respondent.

ORDER

JAWAID MASOOD TAHIR BHATTI (JUDICIAL MEMBER).-The appellant through this appeal has objected to the impugned order of the learned CIT(A), dated 30-4-2005 for the assessment year 2002-2003 setting aside the assessment for de novo decision.

I have heard the learned representatives from both the sides and have also perused the impugned order of the learned CIT(A) and the assessment order.

While perusal of the impugned order of the learned CIT(A), I have found that he has set aside the case for de novo proceedings after his observations as under:

"The grounds of appeal have been considered and assessment order has been perused. It appears that the Assessing Officer has estimated receipts at Rs.934,519 against declared at Rs.293,000 merely on the ground that in a case at NTN No.06-02-0775114 receipts have been declared at Rs.937,519. This particular figure for this very income year for every assessee is not a logical or convincing basis. The estimate of receipts made in such a manner cannot be approved. The addition under section 13(1)(aa) amounting to Rs.223,570 reduced from receipts assessed on the ground that the same have already been considered in the trading addition is also not based on any valid ground as the assessment order does not give any basis or reason for this addition. Further, from the perusal of bank statement in respect of account No.CD 580 maintained with the Bank of Punjab, it is noticed that the Assessing Officer has taken into account the entire credit entries (deposits) of Rs.103,000 instead of `peak deposit' on a specific date for making addition under section 13(1)(aa) of the Income Tax Ordinance, 1979. As per standard practice the Assessing Officer can tax the "peak deposit" in the bank accounts at any specific date if it remains unexplained but not the entire credit entries (deposits) on different dates, as has been done by the Assessing Officer."

I am of the view that after giving clear observations that estimation of receipts is without any logic or convincing basis. Likewise the addition in the trading account is without any basis and the disallowances out of P&L expenses has been made without giving reason for the disallowance under each of the head of account. The matter has been set aside for de novo proceedings affording the Taxation Officer an opportunity to fill in the lacunae in the assessment order which has never been approved by this Tribunal as well as Hon'ble Higher Courts. In view of these facts, the impugned order of learned CIT(A) and assessment order are vacated and declared version of the assessee is directed to be accepted. The appeal filed by the assessee is allowed.

C.M.A./112/Tax (Trib.)Appeal accepted.