Out of the above titled nine appeals, three have been filed by the taxpayer while remaining six have been filed by the tax department against three separate impugned Orders Nos.300, 301 and 302 of 2017 dated 26.09,2017 passed by the learned Commissioner Inland Revenue (Appeals-III), Islamabad for tax years 2014 to 2016. The department also filed 3 appeals against penalty order under section 182 of the Income Tax Ordinance, 2001 against the same impugned order .
2. The department has also filed three Miscellaneous Applications for rectification in the stay orders which has not been pressed by the learned D.R and requested to withdraw the same.
3. The grounds as framed by both the parties are as under: Taxpayer Grounds of Appeal T .Y. 2014 in I.T .A. No. 1752 A. That the impugned order is bad in Law, against the administration of justice, against the facts as well as against the statutory provisions of Income Tax Ordinance, 2001.
B. That Respondent No.1 was not at all justified to confirm the addition under section 111(1)(b) on account of payment made to M/s Mari Petroleum Ltd. amounting to Rs.202,000,000 for purchase of auction plot. The appellant during proceeding submitted affidavit and solemnly declared that in said plot there are three partners with equal sharing ratio. The Respondents Nos.1 and 2 adjudged whole amount against the appellant. It is pertinent to mention here that said asset inadvertently not declared in tax year 2014 BUT duly declared in tax year 2016 well before raid. The appellant already requested for the revision of said declarations, which bluntly rejected by the Respondent. The contention of Respondent No. 2 is unjustified due to the reason all the records are in the custody of Respondent No. 1, which impounded during raid and how it is possible for appellant to submit proof/evidence.
C. That Respondent No.2 was not at all justified to remand the addition of suppressed sales of immoveable properties amounting to Rs.13,381,579,128.00 with unclear directions. The Respondent No.2 was duty bound to instruct the Respondent No.1 to submit the proof of ownership of immoveable property amounting to Rs.
13,381,579,128.00. The Respondent No.2 was duty bound to delete the said addition in case of non-submission of evidence by the Respondent No.2. The alleged ownership of immoveable property would be verified from concerned housing society which is M/s Bahria Town (Pvt.) Ltd. The Respondents have complete data/record/information of alleged proper ties including plot/house no, street no, phase, city name etc. The Article 117, Qanun-e-Shahadat Order , 1984 has lays down general principal that any person dependent upon existence of the fact, then, he has to prove those facts but in the instant case Respondent No.1 severely fail to prove the ownership of alleged properties in the name of appellant.
D. That Respondent No.2 was not at all justified to remand the addition of foreign remittances Rs.39,174,000. The appellant submitted before the CIR (A) that evidence of foreign remittance is in the files, which impounded by the Respondent No.1 during raid. The appellant requested the Respondent No.2 to directed the Respondent No. 1 for returning of records during the proceedings before him but worthy Respondent No.2 ignored the request / prayer of the appellant and remand the case back for further screwing the appellant.
G. That Respondent No.2 was not at all justified to remand the addition of so called unexplained bank balances amounting to Rs.174,607,800, which adjudged, by the Respondent No.1 on the treatment of Peak entries principle.
It is very surprising that Respondent No.1 filed appeal against the treatment of peak entries before this Hon'ble Tribunal in the case of same appellant for the Tax Year 2013 and passed order for the Tax Year 2014 on the basis of peak entries. The Hon'ble ATIR has decided the appeal of your appellant and directed the tax department to treat the appellant as property dealer and calculate the gross revenue @ 1% of total bank credits. The Respondent was duty bound to obey the judgment of this Hon'ble Tribunal of Tax Year 2013 for the Tax Year 2014 Taxpayer Grounds of Appeal T .Y. 2015 I.T .A. No. 1753 A. That the impugned order is bad in Law, against the administration of justice, against the facts as well as against the statutory provisions of Income Tax Ordinance, 2001.
B. That Respondent No.1 was not at all justified to confirm the addition under section 111(1)(b) on account of investment made in M/s. Attibassi Pakistan Ltd amounting to Rs. 1,000,000 . The Respondent during raid impounded all the files and records of the appellant and due to this reason appellant was not in a position to submit the proper reply along with evidence.
That Respondent No.2 was not at all justified to remand the addition of suppressed sales of immoveable properties amounting to Rs. 3,351,510,437.00 with unclear directions. The Respondent No. 2 was duty bound to instruct the Respondent No.1 to submit the proof of ownership of immoveable property amounting to Rs.3,351,510,437.00. The Respondent No. 2 was duty bound to delete the said addition in case of non-submission of evidence by the Respondent No. 2. The alleged ownership of immoveable property would be verify from concerned housing society which is M/s. Bahria Town (Pvt.) Ltd. The Respondents have complete data/record / information of alleged properties including plot/house no, street no, phase, city name etc. The Article 117, Qanun-e-Shahadat Order , 1984 has lays down general principal that any person dependent upon existence of the fact, then, he has to prove those facts but in the instant case Respondent No. 1 severely fail to prove the owners hip of alleged properties in the name of appellant.
D. That Respondent No.2 was not at all justified to remand the addition of so called unexplained bank balances amounting to Rs. 75,030,589, which adjud ged, by the Respondent No. 1 on the treatment of Peak entries principle.
It is very surprising that Respondent No. 1 filed appeal against the treatment of peak entries before this Hon'ble Tribunal in the case of same appellant for the Tax Year 2013 and passed order for the Tax Year 2015 on the basis of peak entries. The Hon'ble ATIR has decided the appeal of your appellant and directed the tax department to treat the appellant as property dealer and calculate the gross revenue Q 1% of total bank credits. The Respondent was duty bound to obey the judgment of this Hon'ble Tribunal of Tax Year 2013 for the Tax Year 2015.
Taxpayer Grounds of Appeal T .Y. 2016 I.T .A. 1754 A. That the impugned order is bad in Law, against the administration of justice, against the facts as well as against the statutory provisions of Income Tax Ordinance, 2001.
B. That Respondent No. 2 was not at all justified to remand the addition of suppressed sales of immoveable properties amounting to Rs.3,565,599,63 9.00/- with unclear directions. The Respondent No. 2 was duty bound to instruct the Respondent No.1 to submit the proof of ownership of immoveable property amounting to Rs.3,565,599,639.00/-. The Respondent No. 2 was duty bound to delete the said addition in case of non- submission of evidence by the Respondent No.2. The alleged ownership of immo veable property would be verify from concerned housing society which is M/s Bahria Town (Pvt.) Ltd. The Respondents have complete data/record / information of alleged properties includin g plot/house no, street no, phase, city name etc. The Article 117, Qanun- e-Shahadat Order , 1984 has lays down general principal that any person dependent upon existence of the fact, then, he has to prove those facts but in the instant case Respondent No. 1 severely fail to prove the ownership of alleged properties in the name of appellant.
C. That Respondent No. 2 was not at all justified to remand the addition of so called unexplained bank balances amounting to Rs.51,526,674/-, which adjudged, by the Respondent No. 1 on the treatment of Peak entries principle. It is very surprising that Respondent No.1 filed appeal against the treatment of peak entries before this IIon'ble Tribunal in the case of same appe llant for the Tax Year 2013 and passed order for the Tax Year 2016 on the basis of peak entries. The Hon'ble ATIR has decided the appeal of your appellant and directed the tax department to treat the appellant as property dealer and calculate the gross revenue @ 1 % of total bank credits. The Respondent was duty bound to obey the judgment of this Hon'ble Tribunal of Tax Year 2013 for the Tax Year 2016.
4. The tax department in the cross appeals agitated the impugned orders on the following grounds of appeal: Tax Department Grounds of Appeal T .Y. 2014 I.T .A. 1836
1. The order of CIR (Appeals) is bad in law and against the facts of the case.
2. The CIR (Appeals) at pages 5 to 10, sub-Paras (i) to (iv) has remanded the case back on additions made under section 111(1) and issued certain directions for which he is not authorized as per provisions of section 129 (1)(a) of the Income Tax Ordinance, 2001. Through the said provision of law, the CIR (Appeals) can only "confirm, modify or annul" an assessment order .
3. Without prejudice to the above, the CIR (Appeals) at page 1, para No. 2 and page 5, sub-Para No. (i) admitted the facts that series of notices were issue d to the taxpayer and that the taxpayer promised on oath to provide the required evidence which he failed and besides the fact that the taxpayer was allowed full access to the impounded record for extraction of necessary evidence/proof, yet remanding the case back to provide further opportunity is against the spirit of the law .
4. The CIR (Appeals) at page 5, sub-para No. (i) failed to apprise the fact that information was obtained from Bahria Town (Pvt.) Ltd., which the taxpayer vehemently claims to be his principal, who certified only an amount of Rs.345,051,999/- to have been paid by taxpayer as agent. The credit of the same was duly given while making assessment. The remaining amount of Rs.13,381,579,128/- remained unexplained , hence, was liable to be added to income under section 111(1)(d) of the Income Tax Ordinance, 2001. Remanding the case back by the CIR (Appeals) on the already settled issue is highly unjustified and against the law .
5. The CIR (Appeals) failed to recognize the fact that definite information was obtained from FIA that taxpayer visited Dubai 6 times which taxpayer also admitted and that the taxpayer was duly confronted on the issue who offered no explanation, hence, deleting the addition in toto on this account is in violation of provisions of subsections (5) and (8) of section 122 of the Income Tax Ordinance, 2001.
6. The CIR (Appeals) at page 8, sub-para No. (iii) misdirected himself that taxpayer was not provided access to the impounded record whereas the taxpayer and his team of accountants were allowed full access to the said record.
The same fact was discussed at length in the assessment order , however , the CIR (Appeals) ignored the above facts and remanded the addition of foreign remittances to the tune of Rs.39,174,000 for de novo consideration.
7. The CIR (Appeals) at page 8, sub-para No. (iii) failed to quote any provision of law under which he remanded back the addition on account of Peak Balance at Rs.174,607,800 and directed to seek explanation on total credited amount found in all bank accounts.
8. The taxpayer was provided 11 opportunities of being heard along with complete access to his impounded hard drives/data/record to extract necessary information for making compliance, even then the taxpayer failed to prove his stance with concrete evidence which indicates that taxpayer has nothing to offer in his defense and just played delaying tactics. Based on the above facts, the assessment of the DCIR was strictly in accordance with law and may be upheld.
9. That the appellant may be allowed to alter , amend, or add more grounds of appeal at the time of hearing.
Tax Department Grounds of Appeal T .Y. 2015 I.T .A., 1837
1. The order of CIR (Appeals) is bad in law and against the facts of the case.
2. The CIR (Appeals) at pages 4 to 9, sub-Paras (i) to (iii) has remanded the case back on additions made under section 111(1) and issued certain directions for which he is not authorized as per provisions of section 129 (1)(a) of the Income Tax Ordinance, 2001. Through the said provision of law, the CIR (Appeals) can only "confirm, modify or annul" an assessment order .
3. Without prejudice to the above, the CIR (Appeals) at page 1, para No. 2 and page 5, sub-para No. (i) admitted the facts that series of notices were issue d to the taxpayer and that the taxpayer promised on oath to provide the required evidence which he failed and besides the fact that the taxpayer was allowed full access to the impounded record for extraction of necessary evidence/proof, yet remanding the case back to . provide further opportunity is against the spirit of the law .
4. The CIR (Appeals) at page 5, sub-para No. (i) failed to apprise the fact that information was obtained from Bahria Town (Pvt.) Ltd., which the taxpayer vehemently claims to be his principal, who certified only an amount of Rs.227,805,000 to have been paid to Bahria Town (Pvt.) Ltd. by taxpayer as agent. The credit of the same was duly given while making assessment. The remaining amount of Rs.3,351,510,437 remained unexplained, hence, was liable to be added to income under section 111(1)(d) of the Income Tax Ordinance, 2001. Remanding the case back by the CIR (Appeals) on the already settled issue is highly unjustified and against the law .
5. The CIR (Appeals) at page 7, sub-para (ii) failed to recognize the fact that definite information was obtained from FIA that taxpayer visited Dubai 6 times which taxpayer also admitted and that the taxpayer was duly confronted on the issue who offered no explanation, hence, deleting the addition in toto on this account is in violation of provisions of subsections (5) and (8) of section 122 of the Income Tax Ordinance, 2001.
6. The CIR (Appeals) at, page 7, sub-para No. (iii), failed to quote any provision of law under which he remanded back the addition on account of Peak Balance at Rs.75,030,589 and directed to seek explanation on total credited amount found in all bank accounts.
7. The taxpayer was provided 11 opportunities of being heard along with complete access to his impounded hard drives/data/record to extract necessary information for making compliance, even then the taxpayer failed to prove his stance with concrete evidence which indicates that taxpayer has nothing to offer in his defense and just played delaying tactics. Based on the above facts, the assessment of the DCIR was strictly in accordance with law and may be upheld.
8. That the appellant may be allowed to alter , amend, or add more grounds of appeal at the time of hearing.
Tax Department Grounds of Appeal T .Y. 2016 I.T .A., 1838
1. The order of CIR (Appeals) is bad'in law and against the facts of the case.
2. The CIR (Appeals) at pages 5 to 8, sub-Paras (i) to (iii) has remanded the case back on additions made under section 111(1) and issued certain directions for which he is not authorized as per provisions of section 129(1)(a) of the Income Tax Ordinance, 2001. Through the said provision of law, the CIR (Appeals) can only "confirm, modify or annul" an assessment order .
3. Without prejudice to the above, the CIR (Appeals) at page 2, para No. 2 and page 5, sub-Para No. (i) admitted the facts that series of notices were issue d to the taxpayer and that the taxpayer promised on oath to provide the required evidence which he failed and besides the fact that the taxpayer was allowed full access to the impounded record for extraction of necessary evidence/proof, yet remanding the case back to provide further opportunity is against the spirit of the law .
4. The CIR (Appeals) at page 5, sub-para No. (i), failed to apprise the fact that information was obtained from Bahria Town (Pvt.) Ltd., which the taxpayer vehemently claims to be his principal, who certified only an amount of Rs.56,200,000/- to have been paid to Bahria Town (Pvt.) Ltd. by taxpayer as agent. The credit of the same was duly given while making assessment. The remaining amount of Rs.3,565,599,639/- remained unexplained, hence, was liable to be added to income under section 111(1)(d) of the Income Tax Ordina nce, 2001. Remanding the case back by the CIR (Appeals) on the already settled issue is highly unjustified and against the law .
5. The CIR (Appeals) at page 7, sub-para (ii) failed to recognize the fact that definite information was obtained from FIA that taxpayer visited Dubai 6 times which taxpayer also admitted and that the taxpayer was duly confronted on the issue who offered no explanation, hence, deleting the addition in toto on this account is in violation of provisions of subsections (5) and (8) of section 122 of the Income Tax Ordinance, 2001.
6. The CIR (Appeals) at page 7, sub-par a No. (iii), failed to quote any provision of law under which he remanded back the addition on account of Peak Balance at Rs.51,526,674 and directed to seek explanation on total credited amount found in all bank accounts.
7. The taxpayer was provided 11 opportunities of being heard along with complete access to his impounded hard drives/data/record to extract necessary information for making compliance, even then the taxpayer failed to prove his stance with concrete evidence which indicates that taxpayer has nothing to offer in his defense and just played delaying tactics. Based on the above facts, the assessment of the DCIR was strictly in accordance with law and may be upheld.
8. That the appellant may be allowed to alter , amend, or add more grounds of appeal at the time of hearing.
5. The department has filed three appeal against the penalty orders on the grounds which are reproduced hereunder Tax Department Grounds of Appeal T .Y. 2014 under section 182(1) I.T .A. No. 1078
1. The order of CIR (Appeals) is bad in law and against the facts of the case.
2. That the Learned CIR (Appeals) was not justified to remand the case to the officer for re-assessment as after the substitution of clause (a) of subsection (1) of Section 129 of the Income Tax Ordina nce, 2001 through Finance Act, 2005 the CIR (A) has been divested of the power to set aside the assessment for re-assessment. This dispensation was specifically provided for disposing the appeal lodged under section 127 of the Income Tax Ordinance, 2001 to bring relief of the taxpayer and also to stop unnecessary deferment of revenue.
3. That the Learned CIR (Appeals) was not justified in remanding the order to the Assessing Officer for reframing assessment because after amendment through Finance Act, 2005, CIR (A) can only modify , confirm or annul the assessment after making (or getting conducted) enquiries or examine the books of accounts etc as he deems fit.
4. That Learned CIR (Appeals) was not justified in remanding the order to the Assessing Officer for reframing assessment because the Larger Bench of the Learned ATIR has already given its verdict that the CIR (A) lacks jurisdiction to remand the case to the Assessing Officer for new Assessment vide order ITAs Nos. 1078 and 1079/LB/2010 dated 16-03-2012.
5. That the appellant may be allowed to alter , amend or add more grounds of appeal at the time of hearing.
Tax Department Grounds of Appeal T .Y. 2015 under section 182(1) I.T .A. No.1071
1. The order of CIR (Appeals) is bad in law and against the facts of the case.
2. That the Learned CIR (Appeals) was not justified to remand the case to the Officer for re-assessment as after the substitution of clause (a) of subsection (1) of Section 129 of the Income Tax Ordinance, 2001 through Finance Act, 2005 the CIR (A) has been divested of the power to set aside the asses sment for re-assessment. This dispensation was specifically provided for disposing the appeal lodged under section 127 of the Income Tax Ordinance, 2001 to bring relief of the taxpayer and also to stop unnecessary deferment of revenue.
3. That the Learned CIR (Appeals) was not justified in remanding the order to the Assessing Officer for reframing assessment because after amendment through Finance Act, 2005, CIR(A) can only modify , confirm or annul the assessment after making (or getting conducted) enquiries or examine the books of accounts etc. as he deems fit.
4. That Learned CIR (Appeals) was not justified in remanding the order to the Assessing Officer for reframing assessment because the Larger Bench of the Learned ATIR has already given its verdict that the CIR (A) lacks jurisdiction to remand the case to the Assessing Officer for new Assessment vide order ITAs Nos.1078 and 1079/LB/2010 dated 16-03-2012.
5. That the appellant may be allowed to alter , amend or add more grounds of appeal at the time of hearing.
Tax Department Grounds of Appeal T .Y. 2016 under Section 182(1) I.T .A. No. 1072
1. The order of CIR (Appeals) is bad in law and against the facts of the case.
2. That the Learned CIR (Appeals) was not justified to remand the case to the Officer for re-assessment as after the substitution of clause (a) of subsection (1) of Section 129 of the Income Tax Ordinance, 2001 through Finance Act, 2005 the CIR(A) has been divested of the power to set aside the asses sment for re-assessment. This dispensation was specifically provided for disposing the appeal lodged under section 127 of the Income Tax Ordinance, 2001 to bring relief of the taxpayer and also to stop unnecessary deferment of revenue.
3. That the Learned CIR (Appeals) was not justified in remanding the order to the Assessing Officer for reframing assessment because after amendment through Finance Act, 2005, CIR(A) can only modify , confirm or annul the assessment after making, (or getting conducted) enquiries or examine the books of accounts etc. as he deems fit.
4. That Learned CIR (Appeals) was not justified in remanding the order to the Assessing Officer for reframing assessment because the Larger Bench of the Learned ATIR has already given its verdict that the CIR (A) lacks jurisdiction to remand the case to the Assessing Officer for new Assessment vide order ITAs Nos.1078 and 1079/LB/2010 dated 16-03-2012.
5. That the appellant may be allowed to alter , amend or add more grounds of appeal at the time of hearing.
6. Out of nine appeals titled above six are cross appeals for all the three years in a manner that where first appellate authority remanded the case back with certain directions the revenue feels aggrieved against the remand order and findings thereof whereas on the issues where the treatment of the learned Deputy Commissioner has been upheld or remanded back the taxpayer challenged such findings of the first appellate authority before this Tribunal.
Regarding Ground No.B of taxpayer appeal for the tax year 2014, the learned AR contended that the learned CIR
(A) confirm the addition of payment made for purchase of plot from M/s. Mari Petroleum Ltd without going through the case record. The learned AR submitted that during the assessment proceeding taxpayer submitted affidavit and solemnly declared that he has 1/3rd share in the said plot. Whereas department taxed whole amount against the appellant. It is submitted that the said property has been declared in the wealth statement of tax year 2016 before raid as well as before the initiation of proceedings. It is submitted that the source of purchase of said share is investment of different investors, which can be verified from the impounded records of the taxpayer , which is still in the custody of department. According to the learned AR, he filed request for revision of said declarations/wealth statement, which was not allowed by the Respondent/Department. It is contended that it is admitted fact that all the record is in the custody of Respondent/Department, which became the reason for non-submission of documentary evidence.
On the other hand the learned D.R on behalf of department supported the orders of assessing officer and the learned CIR(A) and submitted that taxpa yer failed to declare the said plot in the relevant tax year i.e. 2014. He further submitted that declaration of said plot in the Tax Year 2016 is irrelevant. He has therefore requested to uphold the order of the taxation of ficer.
We have heard both the learned representatives on this issue and perused the records of the case in the light of purchase of plot from Messrs Mari Petroleum Ltd. The stance of the Taxpayer was not properly adjudicated as required under the law. The contention of the taxpayer that all the records are in the custody of department is found correct after reading the first para of page 7 of the learned CIR (A) order wherein he himself directed the department to return back the impounded records and on the other hand while adjudicating the issue of submission of evidence regarding payments of investors against purchase of said plot has given his observation that taxpayer failed to submit the evidence.
In view of the above, the case is remanded back to the DCIR on this issue with the direction to return the whole records of the appellant/taxpayer and allow the revision of tax return for the tax year 2014. After revision of return provide him ample opportunity of hearin g and pass fresh order if so required after verification of all documents relating to the purchase of said plot and investment of investors which is obviously source of purchase of said plot.
7. Regarding Ground Nos.(C) for the tax years 2014 and 2015 and (B) for the tax year 2016, the learned AR submitted that the learned CIR(A) remand ed the addition of suppression of sales of immoveable properties without any legal justification. It is submitted that department failed to produce any evidence regarding ownership of immoveable properties, which were sold, by the appellant during the period unde r consideration. The learned AR denied the ownership of alleged property . He submitted that the learned CIR (A) was required to delete the said addition - due to non-submission of ownership evidence of alleged property . It is submitted that the sale and purchase of immoveable property is governed under the law of Transfer of Property Act and Respondent department is duty bound to produce the title deeds i.e. transfer letters/Sale Deeds/Registries etc. of alleged properties. He has highlighted the Article 117, Qanun-e-Shahadat Order , 1984 which lays down general principal that any person depending upon existence of the fact, has to prove those facts but in the instant case Respondent department failed to prove the ownership of alleged properties in the name of appellant.
On the other hand learned D.R on behalf of department is agitating the remand order and submitted that department has also filed cross appeal against the said remand order . The learned D.R supported the order of assessing officer and submitted that taxpa yer failed to produce any evidence in his support. It is submitted that the sale of alleged property is proved from the sales invoices of taxpayer wherein he himself declared as owner of alleged property .
We have heard both the learned representatives and perused the records of the case in the light of sale and purchase of immoveable properties. We are surprised to hear that department is relying upon the sales invoices of the taxpayer regarding sale of immoveable properties, whereas the sale and purchase of immoveable properties are made through transfer of title deed/sale deed.
We are also surprised that the learned CIR(A) has directed to provide the legal evidence regarding sale of alleged immoveable property but department failed to produce any sale deed, transfer letter or any legal document which proved that the taxpayer/appellant was sole owner of alleged sold properties. The learned CIR(A) has remanded the case for fresh order without any cogen t reason, whereas he also admitted that department failed to provide any evidence in his support. We have considered the submissions of both the parties. The learned CIR(A) while dilating upon the matter observed as under:- "After having heard the rival arguments of both the parties, the relevant sales invoices have been perused. The invoices issued on different dates indicate the name of the appellant (taxpayer) as the seller along with the sale amount of the plot sold out. However , it is a well settled known fact that as per general practice in vogue in the real estate sector the property dealers/real estate agents make sale/purchase transactions on behalf of their clients/customers by earning a fixed amount of commission thereon. Therefore the claim of the appellant in this regard cannot be rejected out rightly especially when the Department has not brought on record any conclusive evidence indicating the ownership of the sold out plots by the appellant except for the sale invoices retrieved from the impounded record." [para-1, Page 6] While perusal of the above observations of the learned CIR (A), It is admitted fact that department failed to provide any evidence in his support regarding purchase and sale of alleged properties before the learned CIR (A) and also before this Tribunal. The case of the depa rtment is based on assumptions and his reliance is only on sales invoices which indicates the plot/house no, street no, area and name of seller . It is admitted fact that taxpayer is property dealer and sold properties on behalf of owner . The department failed to probe the ownership of alleged property . It is admitted fact that custodian of all records of the appellant is tax department which he impounded under section 176 of the Income Tax Ordinance, 2001. How it is possible, as per stance of the department that taxpayer is owner of different properties but he failed to prove/submit a single sale deed, sale agreement, transfer letter or any proof regarding purchase of alleged property which subsequently sold through different sales invoices, whereas the impounded record is still in the custody of tax department. It is without any shadow of doubt that the said allegation shows the mala fide on the part of tax department or need some training of concerned officers. It is very painful situation as regard the application of administration of justice, wherein every authority is supposed to work, diligently , fairly , with application of mind. In view of above we have no option except to delete the said addition.
8. Regarding the Ground Nos. (D) for the tax year 2014, the learned AR submitted that the learned CIR (A) remanded the addition of foreign remittan ces Rs.39,174,000/-. It is submitted that evidence of foreign remittance is in the files, which were impounded by the Respondent department during raid along with all the records.
On the other side the learned D.R is supporting the assessment order and is objec ting the learned CIR(A) authority to remand order and requested for upholding the assessment order .
We have heard both the representatives and come to the conclusion that the learned CIR(A) rightly remanded the case back for verification of foreign remittance certificate which are in the custody of tax department. The case has been rightly remanded back on this issue with the direction to return the complete records of the appellant/taxpayer and provide proper opportunity of hearin g for submission of evidence and pass fresh order in this issue if so required.
9. Regarding Ground Nos. (G) for the tax years 2014, 2015 and 2016, the learned AR submitted that the learned CIR (A) remanded the addition of unexplained Peak entries / bank credits. It is submitted that the assessing officer while adjudicating the peak bank credits ignored the peak bank debits. According to the learned AR appellant is engaged in the business of sale and purchase of immoveable properties as property dealer / commission agent and is authorized dealer of M/s. Bahria Town (Pvt.) Ltd. and sold immoveable properties on behalf of Bahria Town and earned commission. The assessing officer took incomplete information from M/s. Bahria Town (Pvt.) Ltd. regarding quantum of amount paid to M/s. Bahria Town (Pvt.) Ltd. It is submitted that assessing authority took the quantum of payments made to Bahria Town regarding only few projects of Rawalpindi and Islamabad and ignored the major projects of Lahore and Karachi.
The AR contended that this Tribunal has decided the same issue of same taxpaye r in ITA No. 663/IB/15 Tax Year 2013 vide order dated 17.11.2015 along with departmental cross appeal decided in ITA (Rect.) No 42/IB/2018 in ITA No. 586/IB/2015 dated 24.09.2018.
On the other hand learned D.R is objecting the remand order and submitted that the learned CIR (A) was required to decide the appeal instead of remanding the case back for de novo conside ration. The D.R submitted that assessing officer called for information from M/s. Bahria Town regarding payments made by taxpayer and revealed that out of the total quantum of transactions lesser amount was paid to Bahria Town.
We have heard both the representatives and gone through the judgment of this Tribunal dated 17.11.2015 ITA No. 663/IB/15 Tax Year 2013, which is on the similar issue among the same parties. The relevant portion of ITA No. 663/IB/15 Tax Year 2013 reproduced hereunder: 9........ Regarding bank entries the learn ed CIR (A) has held that it is the peak credit entry which if unexplained addition is to be made. However as the taxpayer has declared the commission income and deals as a property dealer hence entire bank entries are taxable as in the identical situation, the entire bank entries are subjected to 1% as commission income..........
This Tribunal has also decided the cross appeal ITA (Rect.) No.42/IB/2018 in ITA No. 586/IB/2015 dated 24.09.2018 filed by the tax department for the same tax year i.e. 2013 and upheld the order dated 17.1 1.2015.
After perusal of the order of this Tribun al referred above, we have found that the issues as well as facts and circumstances of the case are same for Tax Years 2014 to 2016 as were in the order for the Tax Year 2013. The principle of consistency would apply in this case. The object of principle is to maintain uniformity and consistency of view/decisions in different Benches of the Tribunal and is aimed at to foster , develop and channelize the system of justice to an extent sufficient enough for the general public to repose its firm confidence in the same. Principles of consistency and certainty occupy a very prominent position in the law of precedent which has to be adhered to in order to maintain discipline in the administration of justice."
In view of above, we are of the considered view that there is no any concept of principle of peak entries in the real estate sector , due to the reason that majo rity of the entries are peak entries which relates to the payments against sale and purchase of property on behalf of customers. The department failed to adjudicate the entire bank transaction in the presence of impounded records or through inquiry . The assessment order as well as Appellate Order shows that appellant at every stage submitted that please verify our transactions from impounded records, but department failed to rebut the stance of the appellant inspite of admitting that he is custodian of records till date. The department also failed to establish that what record is in his custody and what records are required for passing the order .
The demand created on the basis of peak entries are therefore liable to be deleted but in the interest of administration of justice and follow the principle of consistency , we hereby directed the tax department to take one percent of the entire bank entries as commission income of property dealer and recovered the tax as commission agent. The issue is decided in the manner referred above.
10. Regarding Ground Nos. (B) for the tax year 2015, the learned AR submitted that the learned CIR (A) confirmed the addition on account of investment made in M/s. Attibassi Pakistan Ltd. It is submitted that it is admitted fact that all records of the appellant is in the custody of Respondent department which he impounded during raid and due to this reason appellant was unable to submit the proper reply along with evidence.
As we adjudicated in supra paras that records of the appellant was in the custody of department and appellant was unable to submit the same before the assessing officer as well as before the learned CIR (A). Therefore in the interest of justice the case is remanded back on this issue with the direction to return the whole records of the appellant/taxpayer and provide him ample opportunity of hearing and passed fresh order if so required.
11. Regarding the cross appeals filed by the department in Ground Nos. 2, 3, 4, 6 and 7 for the tax years 2014 to 2016 the tax department submitted that the learned CIR (A) was not authorised as per provisions of section 129(1)
(a) of the Income Tax Ordinance, 2001 to remand the case back with certain directions. The learned D.R. submitted that the learned CIR (A) after amendment through Finance Act, 2005 can only modify , confirm or annul the assessment after making (or getting conducted) enquiries or examine the books of accounts etc. as he deems fit.
The learned D.R. contended that series of notices were issued to the taxpayer for submission of records which he failed.
On the other side the learned A.R of taxpayer contended that tax department illegally raided the premises of taxpayer on 10.11.2016 and impounded the whole records, computers, laptop etc. He submitted that tax department issued three notices dated 28.02.2017, 14.03.2017 and 17.04.2017 whereby various discrepancies were alleged. It is contended that the show-cause notice under sections 122(1), 122 (5) read with sections 122(9) and 111(1) and (2) ibid were issued on 09.06.2017 for compliance 17.06.2017. Although all the records were in the custody of tax department but taxpayer attended the office of tax department and tried upto maximum level and in the absence of records satisfied the DCIR.
We have heard both the sides and have peruse facts of the case. It is very surprising for us why department has agitated the remand proceedings in the case where all the impounded records including laptop/computers are in their custody .
We therefore uphold the impugned orders of the learned CIR (A) on these grounds due to the reason that both the parties are aggrieved with the remanding of order by the learned CIR (A) which keeping in view the facts of the case is in accordance with law. The factual issues involved in the appeals are relating to the sales of immoveable property through sales invoices, bank credits/peak entries, foreign remittance and foreign tours which have been adjudicated by us in supra paras.
12. Regarding Ground Nos. (5) for the tax years 2014 to 2016 of the departmental appeals learned D.R. submitted that the assessing officer on the basis of information provided by FIA Islamabad adjudged that taxpayer had undertaken six visits to Dubai (U.A.E) during the year 2016 and his estimated expenses is 3.6 Million for said visit which are liable to tax under section 111(1)(c) of the Income Tax Ordinance, 2001. According to the learned D.R the learned CIR (A) was not justified to delete the said demand which should have to be upheld.
On the other hand learned AR on behalf of Taxpayer submitted that the personal Income of taxpayer is sufficient for Dubai visits. He submitted that assessing officer herself estimated the expenditure amounting to Rs. 3.6 million without any evidence. He has therefore requested to uphold the impugned order of the learned CIR (A) on this ground.
We have heard both the representative and also gone through the record and come to the conclusion that the learned CIR (A) rightly deleted the addition. W e therefore uphold the decision of the learned CIR (A) on this issue.
Regarding the Penalty under section 182 we have found that the tax department almost in all appeals filed on behalf of department submitted that the learned CIR (A) was not justified in remanding the order to the Assessing Officer for re-framing assessment because after amendment through Finance Act, 2005, CIR(A) can only modify, confirm or annul the assessment after making (or getting conducted) enquiries or examine the books of accounts etc. as he deems fit.
On the other hand learned AR on behalf of taxpayer also submitted that the learned CIR (A) was not justified to remand the case back for de novo consid eration. This shows that department and taxpayer are on the same page regarding remanding of the case by the learned CIR(A). Due to the reason that both the parties submitted that CIR
(A) was not justified to remand the case back for passing of fresh order .
We are of the view that the learned CIR (A) rightly remanded the case relating to the penalty orders under section 182 of the Income Tax Ordinance, 2001, due to the reason that main appeal has been decided by the learned CIR
(A) on some issues due to the fact that the records of the taxpayer is impounded by the department. The appeals on. the penalty issues filed by the department are therefore dismiss.
14. Departmental MA (R) No(s). 03 to 053B/2018 Application for Rectification of Stay Order No. M.A (Stay)
2076 and 2077/IB/2017 in Appeals Nos. 1762 and 1763/IB/17 for TY 2014 to 2016.
The facts related to these applications are that appellant / taxpayer filed stay application against tax demand for the tax year 2014 to Tax Year 2016.
The stay applications were fixed for hearing before the Single Bench during winter vacations, which was empowered under section 130(8)(a) of the Income Tax Ordinance, 2001 to hear the applications singly . The learned Single Member (Accountant Member) granting stay for 40 days vide order dated 29.12.2017. The department - refused to accept the order of Single Bench of this Tribunal. The taxpayer filed MA for implementation of stay order dated 29.12.2017. The Division Bench of this Tribunal heard the MA filed by the taxpayer regarding implementation of stay order . The Division Bench of this Tribunal vide order dated 15.01.2018 once again directed the department to detach the bank accounts of the taxpayers as well as detach the immovable properties. The department while accepting the orders of the Tribunal filed these rectification applications with the prayer that the stay order dated 29.12.2017 may kindly be rectified on account of error which are floating on the surface of the record, thereby setting aside the stay order .
The learned D.R requested for withdrawal of these applications and AR also not opposed the request of D.R.
In view of above, the above titled MA(s) filed by the department are hereby dismissed as withdrawn.
15. All the nine appeals, three filed by the taxpayer six filed by the departm ent and three MA filed by the department are disposed of f in the manner referred above.