COMMISSIONER OF INCOME TAX, COMPANIES ZONE-I, LAHORE VS KHALIFA SYED SAIF ULLAH C/O MEHBOOB INDUSTRIES, LAHORE, 2006 PTD-LAHORE-HIGH-COURT-LAHORE 2669 (2006)

Income Tax Ordinance (XXXI of 1979)---

----S. 136(2)---Questions referred relating to factual controversy---High Court declined to answer such questions.

Muhammad Ilyas Khan for Petitioner.

ORDER

Assessee derives income from salary as director of a private limited company. A liability, in his wealth tax statement for the year 1988-89, was shown to the tune of Rs.14,74,000. The amount was shown to have been received from prospective vendee, on behalf of co-director. Vendee statedly paid the amount as sale consideration of shares, belonging to co-director. ITO held that the amount is unexplained and tracked it as deemed income under section 13(1) of the Income Tax Ordinance, 1979 (now repealed). The appeal against the order met the same fate and CIT (Appeals) through order, dated 30-9-1991, upheld the decision of ITO. Learned Tribunal while deciding the second appeal of assessee, vide order, dated 26-12-1993 observed there was a written agreement between the assessee and Messrs Pioneer Alliance Corporation Ltd. Corporation, sale transaction was concluded inter se the parties and the assessee had a valid authority through written instrument on behalf of shareholders of Messrs Big Mac Food Industries Limited to complete transaction. It was also observed that ITO has not verified either from Messrs Pioneer Alliance Corporation Ltd. who advanced money or from the shareholder of Messrs Big Mac Food Industries Limited on whose behalf the transaction was carried by assessee. Learned Tribunal after considering the above facts, held that, impugned addition is imaginary and the same deleted.

2. The instant reference has been filed to consider following questions, for our opinion.

(i) Whether on the facts and in the circumstances of the case the learned Tribunal was right in deleting the addition of Rs.14,74,000 made under section 13(1) of the Income Tax Ordinance, 1979 and admittedly not shown in the Wealth Statements by the creditors.

(ii) Whether on the facts and in the circumstances of the case the Tribunal was justified in holding that, the addition under section 13(1) of the Income Tax Ordinance, 1979 was beyond the ambit and scope of Income Tax Law.

(iii) Whether on the facts and in the circumstances of the case the Tribunal was justified in holding that the ITO has made no effort to discharge the burden of proof, when admittedly the creditors have not shown the amount of Rs.14,74,000 as their assets and whereas the assessee has declared the said amount as liability.

3. Learned Tribunal in its various decisions has held that purchase and sale can only be rejected and estimated figure can be taken, only when such transaction is not verifiable. Property if purchased from sale of jewelry and assessee if furnished the information as to the NTN and account of the purchaser, assessee has stood absolved from his responsibility. Buyer can in such circumstances be summoned under section 148 of the repealed Ordinance. Reference in this respect can be made to the cases of (1992 PTD (Trib.) 739), 1990 PTD (Trib.) 524), 1995 PTD 1359 and 1987 PTD 611. While viewing the Tribunal decision of learned Tribunal, we find that the impugned addition was deleted, on the question of unsatisfactory finding fact. ITO as well as CIT(Appeals), have ignored the documentary evidence and without verifying from the purchaser and also from seller about the transaction, treated the amount as dividend and added it in the income of the assessee.

4. In the above prospective we have examined the questions of law, referred to this Court and find that learned Tribunal has decided the matter and has resolved the factual controversy. All these questions are different versions of one question. The questions clearly reflect that they relate to factual controversy. Since questions raised are not questions of law, therefore, we are not inclined to answer the same.

S.A.K./C-44/LAnswer declined.