.

OFFICE OF THE
DEPUTY COMMISSIONER INLAND REVENUE,
WITHHOLDING TAX UNIT-01,
REGIONAL TAX OFFICE, MULTAN.


1. Tax Year 2013
2. National Tax Number 1835061-5
3. Name of the taxpayer & address M/s Asia Poultry Feeds (Pvt)Ltd.,
359-Shsamabad, Humayun
Road,Chungi No.9, Multan
4. Status Private Limited Company
5. Residential Status Resident
6. Income year ending 30
TH
June
7. Section of assessment U/S 161/205 of the Income Tax
Ord.2001
8. DCR No. ________

ORDER UNDER SECTION 161/205
This is the case of a private limited company earned income from operating business of
manufacturing/sale of poultry feeds. Income tax return for the tax year 2013 has been e. filed under
USAS on 18.01.2014 declaring total income of Rs.337,554,002/-. Being a withholding agent, the taxpayer
has legal obligation to deduct taxes u/s 149, 150, 161,152, 153(1)(a) & 233 of the Income Tax Ordinance,
2001 and having deposit in Government Treasury within seven days under Rule 43 of Income Tax Rules
2002 read with Section 169 of Income Tax Ordinance, 2001.
On scrutiny of return filed for the tax year under consideration, It was observed that the taxpayer
has failed to fulfill its legal obligation of deduct / deposit withholding tax on the payments made on
purchases of various heads which is actionable u/s 161/205 of the Income Tax Ordinance, 2001. The
taxpayer company was confronted through a notice bearing No.479 dated 04.02.2014 for compliance on
11.02.2014. On the due date Mr. ShahidMehmood, CFO of the company attend this office and furnished
required documents which have been examined and are available on record.


Perusal of reply filed by the taxpayer company reveals that the taxpayer company has not
deducted the withholding tax or deposited short payments of withholding taxes of the various supplier.
Oder u/s 161 of the Income Tax Ordinance 2001 is being finalized in the following manner:-

PURCHASE OF IMPORTED RAW MATERIAL: Rs.4221794542/-

The taxpayer company in his reply declared purchase of imported raw material amounting to
Rs.4089799595/-. The tax payer also explained that raw material was also purchased from the
commercial importers. The representative has also furnished bifurcation of the imported raw material
which is given below:-




Head Value Remarks
Imported raw
material
3,917,141,691 The tax payer has furnished copies of LCs which
have been examined and are available on record.
The tax payer contended that no tax was deductible
by the tax payer because it does not fall within the
provision of section 153 of the Income Tax
Ordinance. The explanation of the tax payer is
plausible hence accepted and no adverse inference
is drawn.
Imported raw
material purchased
from the importers
172,657,904 In support purchase from commercial importer tax
payer has furnished copies of invoices, undertakings
and bill of entries which have been examined and
are available on record. The tax payer plea
regarding tax deduction of withholding tax is
plausible hence accepted no adverse inference is
drawn.


The taxpayer company field proof of tax deduction challans u/s 148 alongwith bill of entries and stated
that tax has properly been deducted at the time of custom clearing by the Custom Authorities. The
contention of the taxpayer is verified and accepted, therefore no adverse inference is drawn.

PURCHASE OF LOCAL RAW MATERIAL RS.7,534,400,765/-

The tax payer explained that the actual purchases during the year are Rs.7837086773/- instead of
Rs.7,534,400,765/-. The amount confronted through show cause notice is cost of material consumed.
The break up is given below:-

Balance at beginning of the year Rs.230908453/-
Add Purchases during the year Rs.7837086773/-
Less closing stock/ Inter unit transfer Rs.533594461/-
Cost of raw material consumed Rs.7534400765/-

The tax payer has explained that income tax has properly been withheld against the payments where
ever applicable. In his support he furnished proof of payments which have been examined and are
available on record. Certain payments were made but tax was not withheld on the plea that the
withholdee produced exemption certificates. The tax payer has furnished copies of exemption certificates
which have been examined and are available on record. The tax payer also furnished details of products
purchased during the year which is given below:-

Product
name
Amount paid Exempt
amount
Taxable
amount
Remarks
Sun
Flower
Meal
76781172 76673092 108080 The tax payer explained that meal was purchased
from the solvent plants for consideration of
rs.76673092/- against which no tax has been
withheld. The taxpayer explained that suppliers has
furnished exemption certificate which were issued
by the concerned CIRs which have been examined
and observed that the plea of the tax payer
regarding non withholding of tax against these
payments is plausible hence no adverse inference
is drawn. Whereas the tax payer purchased meal
for consideration of Rs.108080/- against which tax
@ 3.5% has been withheld amounting to Rs.3783/-
which has been deposited in to Govt. Treasury.

Corn
Gluten
3133650 3133650
- The tax payer explained that Corn Gluten for
consideration of Rs.3133550/- was purchased from
M/s Rafhan Maize Products Co. Limited
Faisalabad. No tax was withheld against these
payments on the plea that the suppliers has
furnished exemption certificate which were issued
from the CIR Zone-I RTO Faisalabad which has
been examined and is available on record. The tax
payer plea regarding non withholding of tax against
these payments is plausible hence no adverse
inference is drawn.
Canola
Meal
795698567 625190197 170508370
The tax payer explained that meal was purchased
from the solvent plants for consideration of
Rs.625490197/- against which no tax has been
withheld. The taxpayer explained that suppliers has
furnished exemption certificate which were issued
by the concerned CIRs which have been examined
and observed that the plea of the tax payer
regarding non withholding of tax against these
payments is plausible hence no adverse inference
is drawn. Whereas the tax payer purchased meal
for consideration of Rs.17508370/- against which
tax @ 3.5% has been withheld amounting to
Rs.5967793/- which has been deposited in to Govt.
Treasury. The tax payer has discharged its tax
liability hence no adverse inference is drawn.

Bran
95958757 - 95958757
The tax payer has explained that Bran was
purchased through the brokers and commission
amounting to Rs.480564/- was paid and tax was
deducted amounting to Rs.48056/-. He has
furnished proof of tax withheld and deposited in to
Govt. Treasury which has been examined and is
available on record. As the tax payer has
discharged its tax liability hence no adverse
inference is drawn.
Guar
Meal
191400180 - 191400180
The tax payer explained that meal was purchase
from various parties for consideration of
Rs.191400180/- and tax waswithheld amounting to
Rs.6699006 and deposited in to Govt. Treasury.
Proof in this regard has been provided which has
been examined and is available on record. As the
tax payer has discharged its tax liability hence no
adverse inference is drawn.
Salt
3130726 - 3130726
The tax payer explained that salt was purchased
from various parties for consideration of
Rs.313726/- and tax @ 3.5% has been withheld
amounting to Rs. 109575 which has been
deposited in to Govt. Treasury. The tax payer has
furnished proof of tax deposited in to Govt.
Treasury which has been examined and is
available on record. As the tax payer has
discharged its tax liability hence no adverse
inference is drawn.

Chips
5848803 - 5848303
The tax payer has explained that chips was
purchase from various parties for consideration of
Rs.5848803/- and tax was not withheld against
these payments. The tax payer has not furnished
plausible explanation in this regard. Hence tax @
3.5% is chargeable amounting to Rs.204708/-
which is now charged.

Molasses
18444366 - 18444366
The tax payer explained that purchases for
consideration of Rs.18444366/- was purchase
from only one party namely Muhammad Tariq
Faisalabad and tax @ 3.5% was withheld and
deposited in to Govt. Treasury. The tax payer has
furnished proof of tax deposited which has been
examined and is available on record. As the tax
payer has discharged its tax liability hence no
adverse inference is drawn.

Maize 5693638324
- 569363832
4
The tax payer has explained that commission
amounting to Rs.28266790/- was paid to the
brokers against purchase of maize for
consideration of Rs. 5693638324/- and tax @ 10%
was withheld amounting to Rs.2826679/- and
deposited in to Govt. Treasury. The tax payer has
furnished proof in this regard which has been
examined and is available on record. As the tax
payer has discharged its tax liability hence no
adverse inference is drawn.
Wheat
271402511 - 271402511
The tax payer explained that purchases for
consideration of Rs.271402511/- was purchase
from various parties and commission was paid
amounting to Rs.1181836/- against which tax @
3.5% was withheld amounting to Rs.118184/-
which was deposited in to Govt. Treasury. The tax
payer has furnished proof in this regard which has
been examined and is available on record. As the
tax payer has discharged its tax liability hence no
adverse inference is drawn.

Paddi
354162843 354162843
The tax payer has explained that purchases were
made for consideration of Rs.249047479/- against
which commission was paid amounting to
Rs.2006820/-. The tax payer has withheld tax @
10% amounting to Rs.200682/- and furnished proof
of tax deposited amounting to Rs.178383/-.
Balance amount of Tax Rs.22299/- is recoverable
from taxpayer.
Millet
249047479 249047479
The tax payer explained that purchases were made
for consideration of Rs.249047479/- from various
parties and commission was paid to the brokers
amounting to Rs.1223977/- against which tax @
10% was withheld and deposited in to Govt.
Treasury. The tax payer has furnished proof in this
regard which has been examined and is available
on record. The tax payer has discharged its tax
liability hence no adverse inference is drawn.

Peas
22122661 22122661
The tax payer explained that payments against the
purchases were made for consideration of
Rs.22122661/- and commission was paid to the
brokers amounting to Rs.108304/-. The tax payer
explained that tax @ 10% was withheld Rs.10830/-
and was deposited in to Govt. Treasury. Proof in
this regard has been provided which has been
examined and is available on record. As the tax
payer has discharged its tax liability hence no
adverse inference is drawn
Jawar
3108835 3108835
The tax payer explained that payments against the
purchases were made for consideration of
Rs.3108835/- and commission was paid to the
brokers amounting to Rs.16831/-. The tax payer
explained that tax @ 10% was withheld Rs.1683/-
and deposited in to Govt. Treasury. Proof in this
regard has been provided which has been
examined and is available on record. As the tax
payer has discharged its tax liability hence no
adverse inference is drawn
Day Old
Chicks
7135500 7135500
The tax payer has claimed exemption under SRO
586(I)/91 against the payments made under the
head Day old chicks. The exemption claimed is
under the law hence is allowed.
Freight
14593374 14593374
The payer has explained that payment under the
head Freight was paid Rs.14593374/-. Income tax
@ 2% has been withheld and deposited in to Govt.
Treasury. Proof in this regard has been provided
which has been examined and is available on
record.


SALARIES & WAGES: Rs.115747041/-

Tax able salary Exempt salary Remarks
11101600 87356897 In his reply the taxpayer company declared
expenses under the head salary & wages at
Rs.115747041/-. The taxpayer company also filed annual
employer statement u/s 149 of the Income Tax
Ordinance, 2001 as see Rule 44(1) within time. Perusal
of annual salary statement reveals that the taxpayer
company has declared taxable salary amounting to
Rs.11101600/- and withheld income tax amounting to
Rs.186475. Statements filed as well as documents/salary
sheets provided have been examined and observed that
tax against the taxable salary was deductible amounting
to Rs.211446/- hence there is short deduction of tax
amounting to Rs.25171/-. Now the same is charged and
recovered.

The tax payer also furnished detail of salaries which was
not liable to withholding tax. In view of the details, salary
paid to each employee is below the threshold limit of
withholding tax. Details have been examined and are
available. The tax payer plea regarding non-withholding
of tax is plausible hence accepted and no adverse
inference is drawn.




PAYMENT FOR POWER: Rs.136150475/- & Gas Rs.11893719/-

The taxpayer company filed detail of electricity bills paid during the financial year and tax
u/s 235 of the Income Tax Ordinance, 2001 has already been deducted. The taxpayer company
has also provided copies of Sui Gas bills. The contention of the taxpayer company is verifiable
alongwith copies of ledger account therefore, no adverse inference is drawn.


PAYMENT AGAINST OTHER FUEL RS.119227925/-

Head Taxable
amount
Exempt amount Remarks
Diesel 30964999 The tax payer explained that petroleum
products are exempt from charge
withholding tax under clause 43A and 43C
of Part IV of 2
nd
schedule to the Income
Tax Ordinance, 2001. The explanation of
the tax payer is plausible hence accepted
and no adverse inference is drawn.
Furnace Oil 30701540 The tax payer explained that petroleum
products are exempt from charge
withholding tax under clause 43A and 43C
of Part IV of 2
nd
schedule to the Income
Tax Ordinance, 2001. The explanation of
the tax payer is plausible hence accepted
and no adverse inference is drawn.
Wood
Purchased
46986838 The tax payer explained that purchases
were made for consideration of
Rs.46986838/- from various parties and
commission was paid to the brokers
amounting to Rs.803781/-. The tax payer
explained that tax @10% has been
withheld amounting to Rs.89378/-. The tax
payer failed to produce the proof of tax
deposited. It has been observed that tax
was withheld but not deposited now the
same is charged.
Generator
fuel
expenses
4250000 1404856 The tax payer explained that payment
against generator were made to Insight
Engineering Karachi for consideration of
Rs.4250000/- and tax @ 6% was withheld
amounting to Rs.255000/- which has been
deposited in to Govt. Treasury. The tax
payer further explained that payment of
Rs.1404856/- was made for purchase of
petroleum product from the petrol pumps
hence no tax was withheld being exempt
under clause 43A and 43C of Part IV of 2
nd

schedule to the Income Tax Ordinance,
2001. The tax explanation of the tax payer
is plausible hence accepted and no
adverse inference is drawn.
Electricity
bills
4919692 Payment made against WAPDA bills is not
liable to withholding tax. Hence no tax has
been withheld. The plea of the tax payer
regarding non withholding of tax is
plausible hence accepted and no adverse
inference is drawn.








STORES & SPARES: Rs.461435473/-

Head Taxable
amount
Exempt
amount
Remarks

Packing
Material

















Thread
Cone


Packing
Farms
















Repair &
Maintenance




Rs.1104000/-


















Rs.2328695/-



Rs.5160405/-

















Rs.34396250/-





Rs.127989006/-






















Rs.520000/-























1.The tax payer explained that tax has been
withheld amounting to Rs.38640/- against
the payment of Rs.1104000/- and deposited
in to Govt. Treasury. Proof provided which
has been examined and is available on
record.
2. The tax payer explained that payment of
Rs.127989006/- were made to various
parties and tax was not withheld. In his
support he furnished copies of exemption
certificates which were issued from the CIRs
concerned in favour of the suppliers which
have been examined and are available on
record. The tax payer plea regarding non
withholding of tax against these payments is
plausible hence accepted and no adverse
inference is drawn.



Tax deducted @ 3.5% amounting to
Rs.81504/- and deposited in to Govt.
Treasury. The tax payer has filed annual
withholding statement which shows the
deposit of tax.

1.Tax deducted @ 3.5% amounting to
Rs.180614/-/- and deposited in to Govt.
Treasury. The tax payer has filed annual
withholding statement which shows the
deposit of tax.

2.The tax payer explained that payment of
Rs.520000/- was made to commercial
imported and tax was withheld. In his
support his furnished copies of invoices and
undertaking which have been examined and
is available on record. The tax payer in this
regarding is plausible hence accepted and
no adverse inference is drawn.

1.The tax payer explained that payment was
made for consideration of Rs.34396250/-.
The taxpayer has withheld income against
payment of Rs.847893/- @ 6% Rs.50874/-.

































Medicine


















































Rs.2045121/-



























Rs.17417630/-






















Rs.2453484/-


















2.The tax payer explained that payments
amounting to Rs.33548355/-. Income tax @
3.5% was deductible amounting to
Rs.1174192/- whereas the tax payers has
deposited income tax amounting to
Rs.1079804/-. Balance tax of Rs.94388/-
not deposited. Now the same is charged
along with default surcharge.

The tax payer explained that these
payments were made under following head:-

1.Commercial imports.Rs.6621511/-
2.Self ImportsRs.8830072/-
3. Petroleum products.Rs.1966047/-

In his support the tax payer has furnished
invoices and undertakings which have been
examined and are available on record. In
support of self import the tax payer has
furnished copies of LCs which confirm the
self import the tax payers. Where as in
support of payments made and tax was
deductible under clause 43C of Part IV of
2
nd
schedule of the Income Tax Ordinance,
2001, furnished details of parties which
have been examined and are available on
record. The tax payer plea regarding non
withholding of tax against payment of
Rs.17417630/- is plausible hence accepted
and no adverse inference is drawn.

1.The tax payer explained that payment of
Rs.2045121/- was made to various parties
and tax @ 3.5% was withheld amounting to
Rs.71579/- which was deposited in to Govt.
Treasury. Proof in this regard has been
furnished and is available on record. As the
tax payer has discharged its tax liability
hence no adverse inference is drawn.

2. The tax payer explained that payment of
Rs.2453484/- was made to various parties
but tax was not deductible. In his support
he furnished copies of invoices and
undertakings which were issued by the
commercial importers. The documents
provided have been examined and are
available on record. The Tax payer plea in
this regard is plausible hence accepted and
no adverse inference is drawn.
Vaccination Rs.2089116/-



Rs.622247/- 1. The tax payer explained that payment
under this head of Rs.2089116/-to various
parties out of which Rs.61711/- were paid
through petty cash and were not liable to
withholding tax. Whereas the balance
payment of Rs.2027405/- was paid and tax
@ 3.5% was withheld amounting to
Rs.70959/- and deposited in to Govt.
Treasury. Proof in this regard has been
provided which have been examined and is
available on record. As the taxpayer has
discharged its tax liability hence no adverse
inference is drawn.

2. The taxpayer has made payments of
Rs.622247/- to various parties and not
withheld tax. The tax payer explained that
the suppliers were commercial importers
who were not liable withholding of tax. In his
support he furnished invoices and
undertaking which have been examined and
are available on record. The tax payer
explanation is plausible hence accepted and
no adverse inference is drawn.




Rent Rates, and Taxes Rs.1012838/-

The tax payer explained that the payment comprised of following payments:-

Building rent paid to

Mrs. Rashida Chaudhry Rs.900000/-
ZikriyaGulshan-e-Hadeed, Karachi. Rs.47600/-
Property tax paid. Rs.65238/-

The tax payer explained that tax amounting to Rs.88500/- has been withheld against the
payments of Rs.900000/- made to Mrs. Rashida Chaudhry and deposited in to Govt.Treasury.
Whereas the payment made to ZikriyaGulshan-e-Hadeed Karachi Rs.47600/- is below the
threshold limit of withholding tax hence tax not liable to be withheld. The tax payer has
discharged its tax liability hence no adverse inference is required.

PURCHASE OF FURNISHED GOODS Rs.13483177/-

The tax payer explained that this is not a purchase but a difference of finished goods (poultry
feed) at beginning and end of the year as mentioned in Annexure-H-I which has been brought
on face of return at Serial No.311 and is made up as follows:-

Inventory balance at Beginning of the year Rs.59667629/-

Inventory balance at end of the year Rs.(46184452)
Balance Rs.13483177/-

The tax payer explained that the above figures are not subject to withholding tax. The
explanation of the tax payer is accepted and no adverse inference is drawn.

PROFIT AND LOSS EXPENSES
SALARIES & WAGES: Rs.30561286/-

Taxable amount Exempt
amount
Remarks

8466400

12577881
In his reply the taxpayer company declared expenses
under the head salary & wages Rs.30561286/-. The
taxpayer company also filed annual employer statement
u/s 149 of the Income Tax Ordinance, 2001 as see Rule
44(1) within time. Perusal of annual salary statement
reveals that the taxpayer company has declared taxable
salary and tax was properly deducted and deposited. The
taxpayer company filed detail of salary and wages paid to
production and other staff which are below the monitoring
threshold limit. As per details the tax payer has paid
taxable salary Rs.8466400/- against which income tax
was deductible amounting to Rs.305686/- whereas the
tax payer has deposited Rs.287240/-. Hence there is
short payment of Rs.18446/-which is now recovered.



TRAVELLING EXPENSES: Rs.13007002/-

Head Taxable
amount
Exempt
amount
Remarks
Vehicle running
and maintenance
10235126 The tax payer explained that these
expenses were paid against purchase of
petroleum products for running of vehicles.
No tax was deducted on the plea that the
petroleum products are exempt from
withholding of tax under clause 43A and
43C of Part IV of 2
nd
schedule to the
Income Tax Ordinance, 2001. The
explanation filed has been examined and
is available on record. The plea of the tax
payer regarding non withholding of tax
against petroleum products is plausible
hence accepted and no adverse inference
is drawn.
Travelling
expenses
165918 2605958 The tax payer explained that payment of
Rs.2605958/- was paid against which no
tax was deductible. In view of details
provided payments of Rs.1112325/- were
made to Travel Channel against purchase
of Air Tickets. The tax payer explained that
no tax was deductible against purchase of
air tickets. Further explained that
Rs.1082717/- were paid against fair
charges for tours of the marketing staff for
journey station to station. These payments
were made on petty cash basis and no tax
was deductible. Further explained that
payment of Rs.165918/- was made to
Sheza In hotel and Smart Hotel. Against
these payments tax @ 6% was withheld
and deposited in to Govt. Treasury. The
explanation filed by the tax payer is
plausible hence accepted and no adverse
inference is drawn.


PAYMENT FOR POWER: Rs.2418845/-

The taxpayer company filed detail which comprise of electricity, Gas, Water , Sanitation, Diesel,
LPG Gas Cylinders.. Payments made against these heads are not liable to withhelding tax. Diesel , LPG
Cilinders are also exempt from withholding of tax being petroleum products under clause 43A and 43C of
Part IV of 2
nd
Scheduele to the Income tax Ordinace, 2001. The tax payer has furnished details against
the payments and observed that the explanation of the tax payer is plausible hence accepted and no
adverse inference is drawn.


COMMUNICATION CHARGES Rs.4019953/-

The tax payer explained that these expenses comprise of various head i.e Telephone, Cyber Internet
Services, Multinent Pakistan Pvt. Ltd., Sherazi Trading Pvt. Ltd. TCS Pvt. Ltd. Leopard CourioerServces,
and Electro Technich. The tax payer has explained that the payments made to these parties are expempt
from charge of withholding tax. In his support he furnished copies of exemption certificates issued from
the companies which have been examined and are available on record. However, while examining the
payments it has been observed that tax amounting to Rs.1103/- was to be withheld but the same was
been withheld and deposited. Now the same is recoverable. For rest of the mount the explanation of the
tax payer is plausible hence accepted and no adverse inference Is drawn.

Rs.1103/-

REPAIR AND MAINTENANCE Rs.1588342/-

Head Taxable
amount
Exempt
amount
Remarks
Amjad Traders
Multan.



17537









Tax deducted @ 3.5% amountingto
Rs.614/-and deposited in to Govt.
Treasury. Proof in this regard has been
provided which has been examined and
is available on record.


Bashir Electric
Store Multan.




Cyber Internet





Koldkraft Pvt.
Ltd. Lahore





M.A Qadir
Hardware Store
Multan.



Ruby Electric






S.H.Steel Mills
Lahore.





Shirazi Trading
Co.. Pvt. Ltd.





Syed
Enterprises
Multan.




The imperial


Rs.10090/-











318084/-






Rs.4660/-





Rs.71363/-





















Rs.23094/-














Rs.25000/-






















Rs.31304/-










Rs.21216/-












Rs.128400/-


Tax deducted @ 3.5% amounting to
Rs.354/- and deposited in to Govt.
Treasury. Proof in this regard has been
provided which has been examined and
is available on record.

Exemption Certificate provided which has
been issued by the CIR Zone-IV RTO
Lahore. The certificate has been
examined and observed that the plea of
the tax payer regarding non withholding of
tax is plausible hence accepted.

Tax deducted @ 3.5% amounting to
Rs.11133/- and deposited in to Govt.
Treasury. Proof in this regard has been
provided which has been examined and
is available on record.

Tax deducted @ 3.5% amounting to
Rs.164/- and deposited in to Govt.
Treasury. Proof in this regard has been
provided which has been examined and
is available on record.



Tax deducted @ 3.5% amounting to
Rs.2498/- and deposited in to Govt.
Treasury. Proof in this regard has been
provided which has been examined and
is available on record.

Exemption Certificate provided which has
been issued by the CIR Zone-IV RTO
Lahore. The certificate has been
examined and observed that the plea of
the tax payer regarding non withholding of
tax is plausible hence accepted.

The tax payer explained that the supplier
is a Commercial importer hence no tax
was deductible. In his support he has
furnished copy of invoices which has been
examined and are available on record.


Tax deducted @ 3.5% amounting to
Rs.809/- and deposited in to Govt.
Treasury. Proof in this regard has been
provided which has been examined and
is available on record.

The tax payer explained that the supplier
Electric
Company
Lahroe


Unique Display
Centre Multan.





WAPDA
PAYMENT





Rs.67715/-













Rs.426670/-
is a Commercial importer hence no tax
was deductible. In his support he has
furnished copy of invoices which has been
examined and are available on record.

Tax deducted @ 3.5% amounting to
Rs.2370/- and deposited in to Govt.
Treasury. Proof in this regard has been
provided which has been examined and
is available on record.



MEPCO payments of Rs.372370/- and
Rs.54300/- which is paid under the head
demand notice and security. The
payments are not liable to withholding tax.
hence no adverse inference is drawn.






STATIONARY/OFFICE SUPPLIES RS.1434673

The tax payer has furnished detail of parties from whom stationary was purchased
during the year. The details provided is given below:-


Particulars Amount Tax
deducted
@ 3.5%
Tax
deposited
Balance payable.
Shirazi Trading Co. Pvt.
Ltd.
87810 3073 3073 -
I.A Printers Multan 494380 17303 17303
-
Chawala Stationers Multan 177290 6205 6205
-
Printing & Stationery BTL 675193
BTL BTL
The tax payer has
explained that payments
were made to various
parties for purchase of
stationary and photo
copies bill and no tax was
deductible. The tax payer
failed to furnish proof in
this regard. Therefore, tax
against these payment @
3.5% is charged which
comes to Rs.23671/-.
Total

26581
-

The tax payer has furnished detail of Rs.675193/- which shows that payments were made to various
parties and each party payment is below the threshold limit of withholding tax. Details have been
examined and are available on record. The explanation of the tax payer for non withholding of tax is
plausible and accepted.

PROFESSIONAL CHARGES RS.1079682/-

Taxable
amount
Exempt
amount
Remarks

500000

579682
The tax payer explained that expenses claimed under this head
comprise of Fees & subscription, Professional tax paid to Punjab
Govt., legal Mortgage charges Form 32A, M. Karim Arshad Advocate
and Stamp papers. The tax payer explained that these payments are
not liable to withhelding tax being govt. dues. However, against the
payment of Rs.500000/- paid under the head Auditor Remuneration
were liable to withhelding tax amounting to Rs.30000/-. The tax payer
has withheld tax and deposited in to Govt. Treasury. In his support
he has furnished copy of paid challan which has been examined and
is available on record. The explanation of the tax payer is plausible
hence accepted and no adverse inference is drawn.


SELLING EXPENSES RS.58928177/-

The tax payer has explained that the expenses claimed comprised of following heads:-

1. Staff Salaries & Benefits Rs.19290174/-
2. Communication Expenses Rs.1108084/-
3. Vehicle running & Maintenance Rs.21479771/-
4. Travelling & Conveyance Exp. Rs.2362729/-
5. Unloading & Vaccination charges. Rs.14171035/-
6. Advertisement Expenses Rs.293717/-
7. Miscellaneous Expenses Rs.222667/-


The tax payer further furnished explanation regarding the mentioned heads which is given as
under:-

Taxable salaries Rs.10660000/-
Non Taxable salaries. Rs.7675270/-
Bonus. Rs.954904/-

The taxpayer has furnished annual withholding statement e-filed under section 149 of the
Income Tax Ordinance as well as copies of paid challans. Against the nontaxable salaries, the
tax payer has furnished salaries sheets which show that the salaries paid amounting to
Rs.7675270/- to various employees are not liable to withheld tax because the salary paid to
each employee is below the threshold limit of monitoring of withholding tax. Details have been
examined and are available on record. However, while examining the taxable salaries it has
been observed that there is short deduction of withholding tax amounting to Rs.34509/-. The
explanation of the tax payer is plausible hence accepted and no adverse inference is drawn.

COMMUNICATION EXPENSES RS.1108084/-

The tax payer explained that these expenses comprise of telephone bill, mobile bills. These
payments against bills are not liable to withholding tax. In his support he has furnished copies of
bills which have been examined and are available on record. The explanation of the tax payer is
plausible hence accepted.

VEHICLE RUNNING AND MAINTENANCE RS.21479771/-

The tax payer has explained that these expenses comprise of purchase of Petrol/Diesel for
running of vehicle owned by the company. The petroleum products are exempt for charge of
withholding tax. In his support he has furnished detail which has been examined and is available
on record. The explanation of the tax payer is plausible hence accepted and no adverse
inference is drawn.

TRAVELLING & CONVEYANCE RS.2362729/-

The tax payer has explained that these expenses represent actual re-imbursement of expenses
incurred by marketing staff. In his support he has furnished details which have been examined
and are available on record. The taxpayer explanation regarding non withholding of tax against
these payments is plausible hence no adverse inference is drawn.

LOADING AND UNLOADING EXPENSES RS.14171035/-

The tax payer explained that these are non-cash payment expenses representing incentives to
the farmers which have been shown on the invoices of the company. The tax payer explained
that these expenses are paid Rs.1/- per bag for unloading and Rs.1/- for vaccination. The tax
payer has furnished details which have been examined and are available on record.

Advertisement Expenses Rs.293717/-

The tax payer has explained that these expenses were paid to various parties and each party
payment remain below the threshold limit of withholding tax hence no tax has been withheld. In
his support he has not furnished party wise details. Hence tax @ 6% is charged which comes
to Rs.17623/-.

Misc. Expenses Rs.222667/-

The tax payer has explained that these expenses were paid to various parties and each party
payment remain below the threshold limit of withholding tax hence no tax has been withheld. In
his support he has not furnished party wise details. Hence tax @ 3.5% is charged which comes
to Rs.7793/-.


In view of the facts of the case demand of withholding tax is
determined as under:-



S U M M A R Y
HEAD OF EXPENSE TAX PAYABLE U/S 161
Raw material (local) Rs.227007/-
Salary&wages(manufacturing) Rs.25171/-
Store & Spares Rs.94389/-
Salary & wages
(Admin)
Rs.18446/-
Printing & Stationary Rs.23632/-
Advertisement. Rs.17623/-
Misc. Expenses. Rs.7793
Communication
charges
Rs.1103/-
Salaries and benefits(selling) Rs.34509/-
Wood purchased Rs.89378/-

TOTAL:-

Rs.539051/-


Total default tax payable u/s 161 Rs.539051/-
Add default surcharge u/s 205 (days of default 273) Rs.72573 /-
Total Tax Payable u/s 161/205 of the Income Tax
Ordinance, 2001 Rs.611624/-

Issue demand notice, copy of the order along with challan for payment.




Dated: (ABID RASOOL KHAN)
DEPUTY COMMISSIONER