It is contended on behalf of the appellant that statement under Section 143-B of the Income Tax Ordinance, 1979 was filed by the appellant declaring imports of Rs. 15,27,750/-, whereupon, tax at the rate of 2% was paid. Subsequently, show-cause notice was issued by respondent No. I to the appellant requiring an explanation as to the source of the funds employed in the import of the said consignment. The appellant contested the issuance of the show-cause notice on the ground that the respondent had no jurisdiction to ask for the source of the funds for the consignment as the tax deducted at source was full and final discharge of the tax liability in view of sub-section (4) of Section 80-C of the Ordinance. The contention of the appellant did not find favour and were rejected and the case was re-opened under Section 65 and notice issued in this behalf to the appellant. The appellant challenged the aforesaid notice under Section 65 of the Income Tax Ordinance before this Court through W.P. No. 6573 of 1994 which was disposed of by a learned Single Judge of this Court in terms of order dated 27.6.1994 holding:- "I regret my inability to agree with the learned counsel. Sub-section (4) of Section 80-C is hedged with the condition that the assessee should have no other source of income, It is not disputed by the petitioners learned counsel that the income tax department can inquire into as to whether or not there are other sources from which a person had derived his income. This aspect of the matter which is purely factual cannot be adjudicated upon in the Constitutional jurisdiction of this Court.
Dismissed in limine."
2. That respondent No. 1 vide order dated 30.6.1994 completed the assessment and imposed an income tax of Rs. 7,50,630/-.
3. The appellant challenged the order dated 30.6.1994 by way of appeal before respondent No. 3 which was dismissed on 16.7.1996 whereafter the appeal preferred before the ITAT too did not find favour and was dismissed vide the impugned order dated 20.2.1998.
4. In pith and substance the contention raised by the learned counsel for the appellant is that a statement under Section 143-B had been filed under the presumptive tax regime and the tax deducted at source was the full and final discharge of the tax liability and the provision of Section 13, 1TO could not be invoked in respect of the funds/investment employed for the import, nor the source of such funds/investment could be questioned by the Income Tax Department, In support of his contention, the learned counsel relies upon sub-section (4) of Section 80(c) of the 1TO, 1979.
5. It was contended that the term final discharge of liability extends not only to the incidence of the tax liability upon the transaction in question but also to liability if any in respect of funds used or employed for such transactions.
6. The entire case of the appellant hinges upon the interpretation of Section 80-C of the 1TO, 1979.
The said provision, its vires, its meaning and its extent and applicability was scrutinized in a celebrated judgment of the august Supreme Court in the case reported as Elahi Cotton Mills Ltd. Vs. Federation of Pakistan (1997 SC 582) and the relevant portion is reproduced as hereunder:-- "In our view Sections 80-C and 80-CC of the Ordinance fall within the category of presumptive tax as under the same the persons covered by them pay a pre-determined amount of in full and final discharge of their liability in respect of the transactions on which the above tax is levied."
7. It was further observed by their Lordships of the apex Court at page No. 698 as under:-- "We may observe that the object of Section 80-C seems to be the eliminate the hassle of filing of returns by an assessee and going through the normal procedure culminating in framing of an assessm ent order and to eliminate the involvement to the minimum extent of the Income Tax Department. To achieve the above object, above sub-section (4) was enacted."
8. In the light of the observations of their Lordships of the august Supreme Court, it is dear and obvious that the final discharge of tax liability is limited only to the gains and profits from transaction in question. Such transactions are identified in Section 80-C. It does not extend to investment or funds employed for entering into transaction. Such investment falls within the mischief of Section 13(aa). The tax deducted under the Presumptive Tax Regime is only with reference to the income from the transaction itself only, In the instant case, the liability has not been raised with reference to the gains or profits from the transaction i.e. The import of the consignment, but with reference to funds/investment utilized for such import.
9. Even otherwise, if the argument of the learned counsel is accepted, then Section 80-C would take the form of an amnesty or an opportunity to convert the black money into white with no question asked. This is not the meaning and purpose of Section 80-C as held by the august Supreme Court in the above reported cases and the relevant portion is reproduced as follows:- "The assessee in disguise of total discharge of his liability under sub-section (4) of Section 80-C cannot convert black money into white money by showing the black money as a profit earned, though factually it is not so."
10. As a sequel of the above discussion, we find no merit in this appeal and dismiss the same accordingly.