FBR detects Rs3bn un-accounted revenue during investigation



The Directorate General of Intelligence and Investigation (I&I)-IR of Federal Board of Revenue (FBR) has detected an unexplained income of Rs 3 billion in a case of a land developer in Wah Cantt.

According to information available with Pakistan Today, Directorate of Intelligence & Investigation-IR, Islamabad initiated investigations against a land developer in Wah Cantt. The said taxpayer runs a property business.  The said business tycoon deals with people in purchases of plots and construction. He makes transactions individually and through banks.

Investigators of the FBR have detected irregularities in the transactions made by the property dealer.

According to investigators, the said taxpayer showed huge expenses in the bank transactions. They noted that quantum of business and expenses direly need that sum of tax must be submitted in the national exchequer after deductions from payments made to the supplier as his withholding agent.

Moreover, he submitted small amount as withholding tax as compared to a huge sum of amounts in transactions. In his withholding tax return for 2012-2016, there are also discrepancies.

According to his e-payments against deductions as withholding agent during the tax year 2012 to 2016, taxable amounts were Rs 274.92 million. However, his total cost of sales during the same period was declared at Rs 4852.33 million. Moreover, the taxpayer paid Rs 5.8 million (purchase of asset) at two per cent of the ITO, 2001 in tax year 2015 which works back to Rs 290.03 million for the value of the asset but no such property has been declared in his wealth statement correspondingly. Hence, this amount warrants addition in his income under section 111 of ITO, 2001.

The investigators of I&I-IR further found that the taxpayer has concealed closing balances in his tax declarations except for closing balance of Rs 21.35 million in tax year 2013. They said seven bank accounts of the taxpayer were traced out and their closing balances as on 30th June of tax years 2012 to 2016 are considered income from unexplained sources.

The concealed balances are Rs 25.2 million for tax year 2012, Rs 20.24 million for tax year 2013, Rs 345.26 million for tax year 2014, Rs 169.31 million for tax year 2015 and Rs 499.95 million for tax year 2016. Legal action for addition the same is also warranted, they added.

Further perusal of taxpayer’s bank accounts statements reveals that taxpayer has excessively under-declared his business quantum because amounts of credits/deposits (bulk in cash) in his accounts far exceed his declared quantum of sales and other sources.

The unexplained credits are Rs 301.56 million for tax year 2012, Rs 503.76 million for tax year 2013 and Rs 762.25 million for tax year 2016. The said unexplained credits also warrant legal action to include the same in his total income. The taxpayer, also, declared cash gifts of Rs 94.9 million in three tax years but unable to produce any evidence against them, sources said.

Accordingly, investigation report has been sent to chief commissioner-IR, RTO, and Rawalpindi to initiate legal action for addition U/S 111 of Income Tax Ordinance, 2001 into to his income.