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AGP directs FBR to take action against M/s Int’l Complex Projects on concealment of income

AGP directs FBR to take action against M/s Int’l Complex Projects on concealment of income

ISLAMABAD: Auditor General of Pakistan (AGP) detected the case of non-levy of tax on concealment of income and assets amounting to Rs16,074.90 million by Corporate Regional Tax Office (CRTO) Karachi and recommended to Federal Board of Revenue (FBR) to take action as per law to recover the losses and responsibility may be fixed on the official or the officer at fault.

According to the details, Auditor General of Pakistan also suggested that to develop an internal control mechanism to prevent such lapses in future.

According to audit findings, M/s International Complex Projects Limited (NTN 071029-3) under the jurisdiction of CRTO Karachi, filed income tax returns electronically by declaring total income Rs11.52 million and PTR receipt (dividend income) at Rs118.96 million.

It is pertinent to mention here that the taxpayer himself declared the projects namely “Harbour Front” and Dolmen Mall. The taxpayer neither submitted accounts of the completed projects nor the CRTO called the same.

It is further pertinent to mention here that taxpayer submitted their returns and audited accounts consolidated from various projects, namely Harbour  Front, Doleman Mall, Clifton, Dolemem Mall Tariq Road and Hydri which were completed and now Twin Towers mentioned as their project is under construction.

As per audited accounts, the taxpayer declared that due to completion of Dolemen Mall the company decided to discontinue the capitalization of borrowing cost.

According to the audited reports, M/s Arif Habib Group is the buyer of the project of Harbour Front and Dolemen Mall (combined). Whereas taxpayer shows complete projects are transferred under the head “Investment Properties” in the balance sheet.

It transpired that taxpayer sold out the property but the same was neither shown in sale proceed. It means taxpayer concealed the sale proceed of the project which comes to Rs 51,438.72 million, whereas taxpayer only showed Rs 3.69 million tax under NTR.

Therefore, taxpayer evaded tax amounting to Rs16,971.09 million, which attracted the provision of section 111 and penal action of 100% penalty on tax evasion under section 182 (12) of Income Tax Ordinance 2001. But the CRTO did not initiate any legal proceedings to rectify the same and no action was taken to call for complete details of the project.