T.A. NO. 2131/KB OF 1995-96, DECIDED ON 26TH FEBRUARY, 1998 Versus T.A. NO. 2131/KB OF 1995-96, DECIDED ON 26TH FEBRUARY, 1998

ORDER

S. M. S19TAIN (ACCOUNTANT MEMBER) . ---The Department, in this appeal, has objected to the order of the learned CIT(A) for cancelling the assessment order passed under section 62 of the Ordinance, with the directions that the respondent's return should be accepted under Self -Assessment Scheme and assessed under section 59(1), holding that the provisions of clause (e) or Paragraph-6 of Circular No. 16 is not a bar on the qualification of respondent's return under the Self-Assessment Scheme but a guideline for immunity to the source of business capital.

2. We have heard the learned representative of the two parties. Briefly, the facts are that the appellant is an Association of five Persons (AOP). Their names, NTN, Share in the AOP, and Circle where they are being assessed from year to year ace being reproduced hereunder from the impugned assessment order:

Name & Father's Name

NTN

Ratio of Share

I.T.Cir.

1. Mr. M Rafique S/o Mr. M. Shaft

08-06-1796012

19 paisas

Cir.II Hyd

2.Mr. M. Taufiq S/o Mr. M. Rafiq

08-05-1789879

12 paisas

Cir.I Hyd

3. Mr. M. Shafiq S/o Mr. M. Shafi

08-05-1787612

19 paisas

Cir. I Hyd

4. Mr. M. Saleem S/o M. Ibrahim

08-05-1787612

25 paisas

Cir. I Hyd

5. Mr. Nazar Muhammad S/o Haji Juman

08-06-1791607

25 paisas

Cir. II Hyd.

3. Two members of the AOP have purchased of flour mill on 8-1-1992 for a consideration of Rs.1,500,000. Their names as recorded in the sales deed are Mr. Muhammad Rafique and Mr. Muhammad Saleem. Admittedly, the respondent has filed the undermentioned documents vide letter dated 2-2-1994:

"Wealth statement of the member of A.O.P. for the period 3-6-1992 alongwith reconciliation statements and related documents, declaring gross/net wealth as under: --

1. Mr. Nazar Muhammad S/o. M. Juman

Rs.663,607

2. Mr. M. Saleem S/o. M. Ibrahim

Rs.556, 152

3. Mr. M. Taufique S/o M.Rafiq

Rs.255,200

4. Mr. M. Rafique S/o. M. Shafi

Rs.375,000

5. Mr. M. Shafique S/o M. Shafi

Rs.384,087

4. The learned DCIT, however, has excluded the first return of total income filed on behalf of the AOP declaring total income, for five months, at Rs.35,000, because clause (e) of Paragraph-6 of the Circular No. 16 of 1992 dated t-7-1992 provides:

(e) In case a new tax payer derives income from a business, it shall be presumed that his business capital at the end of the income year was not more than three times the business income declared. Sources of his business capital to this extent shall not to be investigated."

5. Having given -bur careful consideration to the foregoing facts of the case and relevant provisions of the Self-Assessment Scheme for the year we are of the considered view that the finding of the learned CIT(A) does not warrant any interference; hence confirmed.

6. Consequently the appeal is dismissed.

M.B.A./533/Trib. Appeal dismissed.