2004 PLP (Trib (PTD)

Rs.30,000 (ii) Addition under section 13(1)(aa) for providing loan of Rs.13,50,000 of unexplained sources on 29‑7‑1989 as discussed above. Rs.13.50,000 Total Income. Rs.14,31,193 In second appeal, addition under section 13(1) was set aside to be re‑considered in the year when the amounts were discovered. Orders under sections 111 and 108(b) were confirmed.

4. The assessee came up in miscellaneous application requesting for recalling of the above orders praying that the following undisputed issues may be decided after hearing the two parties. We concluded that ground No. 3 in the original grounds of appeal could not be adjudicated upon. The orders were thus recalled.

5. The learned A.R. filed the following documents in the support of his contention. (i) 1998 PTD (Trib.) 123.‑‑‑Wherein our, learned brothers had held that unexplained investment can be treated deemed income of the income year in which the assessee is found to have made any investment. (ii) 1993 PTD (Trib.) 689.‑‑‑Wherein our learned brothers held that under statement of investment in purchase of property has to be assessed to tax under section 13 in which year the property was purchased by assessee by considering it as income. (iii) 1995 PTD (Trib.) 318.‑‑‑Wherein the Full Bench considered this aspect and decide that unexplained investments made during an income year can be deemed as an income of that year alone. (iv) I.T.A. No.1514/LB of 1987‑88.‑--(Assessment year 1986‑87) order, dated 21‑6‑1997 wherein our learned brothers (wherein the worthy Judicial Member was author of the order) held that the property impugned had been purchased by the assessee in an earlier year and the same was not to be added in the subsequent year.

6. Perusal of the appellate orders show that the learned CIT(A) did not take up this matter in detail and simply confirmed the order of the lower officer holding that the treatment at the hands of the Assessing Officer was in order.

7. We have considered the arguments of the two sides and the facts available on record and are convinced that there is no doubt that the loan was advanced by the assessee/appellant to Messrs Khan Brothers (Pvt.) Ltd. on 29‑7‑1989 falling in the assessment year 1990‑

91. There is no doubt that these facts were well‑known to the Assessing Officer at the time of initial assessment also. These were apparent from the wealth statements of the assessee and from the books of accounts of the company. The learned A.R. relied upon the following judgment of their Lordships of Supreme Court of Pakistan in his support:‑‑ Edulgi Dinshaw Ltd. v. Income Tax Officer, reported as 1990 PTD 155 (SCP).‑‑Wherein their Lordships of Supreme Court of Pakistan had held that once all the facts had been fully disclosed by the assessee and considered by the Income Tax Authorities and the assessment had been consciously completed and no new facts had been discovered, there can be no scope for interference with this concluded transaction under the provisions of section 65 on the ground that the income chargeable to tax under Ordinance has escaped assessment or has been under assessed ; in the meaning of section 108(b) of the Ordinance. He also relied on another case‑law reported as PTCL 1997 CL.P. 67.

8. The perusal of the assessment orders does not show at any stage that this loan of Rs.13,50,000 to Messrs Khan Brothers (Pvt.) Ltd. was ever concealed. The proceedings under section 65 were taken up on the basis of wealth statement already available on record.

9. Respectfully following the decision of their Lordships of Supreme Court of Pakistan as well as large number of orders discussed above of our learned brothers, we are convinced that proceedings under section 65 were uncalled for not only because the entries pertain to a subsequent year other than the year assessed but no new facts had been brought on record to justify action under section 65 of the Ordinance. The appeal thus succeeds and the orders passed under sections 65/63 stand cancelled. Accordingly, the other two orders under section 111 and 108(b) also lack the legs to stand and are hereby cancelled. All the three appeals succeed as above. C.M.A./973/Tax (Trib.) Appeals accepted.