High Court Division · Special Statutory Jurisdiction
BBC Bangladesh Limited v Commissioner of Taxes, Taxes Zone-8, Dhaka
Income Tax Reference 317/2018 · Decided 14 May 2026
BBC Bangladesh Limited, the local company of a news organisation headquartered in the United Kingdom, returned a net loss for the 2013-2014 assessment year. The Deputy Commissioner of Taxes disallowed Tk.16,30,000 of expenses and added Tk.3,87,87,750, received from abroad as share money deposit, to its business receipts, assessing income of Tk.91,05,653. The Commissioner of Taxes (Appeals) and the Taxes Appellate Tribunal upheld the assessment. On the company's reference under section 160(1), the High Court Division held that the disallowances rested on the company's failure to produce supporting evidence, a factual matter on which the Tribunal's findings would not be disturbed. However, there was no provision under which foreign currency invested as share money deposit could be treated as business income under section 28; section 19 deems only unexplained or unrecorded investments to be income from other sources. The Deputy Commissioner had himself accepted the deposit as equity on the balance sheet. The first part of the question was answered for the Revenue and the second for the assessee.
- Q1
Whether the Tribunal was justified in upholding the disallowance of Tk.16,30,000 of expenses for want of supporting evidence.
- Q2
Whether a foreign remittance of Tk.3,87,87,750 received as share money deposit could be added to the company's business income under section 28 of the Income Tax Ordinance, 1984.
- The Deputy Commissioner's power under section 35 to reject accounts is discretionary and quasi-judicial, and must be based on tangible defects and a speaking order.
- Certification of accounts by a Chartered Accountant under section 35(3) does not dispense with the requirement to produce evidence supporting claims for deductions.
- Disallowance of expenses for lack of verifiable evidence is a factual matter on which the Tribunal is the final arbiter, and the High Court Division will not disturb its findings.
- There is no statutory basis under section 2 or section 28 of the Income Tax Ordinance, 1984 for treating foreign remittance received as share money deposit as business income.
- Section 19 deems excess or unrecorded investments to be income from other sources only where the assessee gives no satisfactory explanation, which did not apply where the remittance was documented and accepted as equity.
We find no provision of law that allows for the determination of foreign currency invested as a 'share money deposit' as income under section 28 of the Ordinance.
In the court’s own words.
Income Tax Reference 317/2018, as published by the Supreme Court of Bangladesh. 19 pages, with paragraph numbers for citing.
1IN THE SUPREME COURT OF BANGLADESH
HIGH COURT DIVISION
2(SPECIAL STATUTORY JURISDICTION) INCOME TAX REFERENCE APPLICATION NO. 317 OF 2018
In the matter of:
An application under section 160 of the Income
Tax Ordinance, 1984.
In the matter of:
BBC Bangladesh Limited.
…….Applicant
-V E R S U S –
The Commissioner of Taxes, Taxes Zone-8,
Dhaka.
…….Respondent.
Mr. M. Saquibuzzaman, Advocate with
Mr. Kazi Ershadul Alam, Advocate with
Mr. Ragib Kabir, Advocate
……… For the applicant
Mr. Akhtar Farhad Zaman, D.A.G. with
Ms. Shadia Afrin Shapla, D.A.G. with
Mr. Arif Khan, D.A.G. with
Mr. Sovan Mahmud, A. A. G.
Mr. Md. Faridul Islam, A. A. G. and
Mr. Md. Nazmul Haque, A. A. G.
………. For the respondent.
Heard on 30.04.2026, 07.05.2026 & Judgment
on 14.05.2026
3Present: Mr. Justice S.M. Maniruzzaman
4And Mr. Justice Dihider Masum Kabir Dihider Masum Kabir J:
5This reference application under section 160(1) of the Income Tax Ordinance, 1984 is at the instance of the assessee-applicant against an order of the Taxes Appellate Tribunal, Division Bench 1, Dhaka passed in Income Tax Appeal No. 2448 of 2017-2018 (Assessment Year 2013- 14) dated 28.02.2018 which was communicated to the applicant on
16.04.2018 disallowing the applicant's appeal against the order dated 31.07.2017 passed by the Commissioner of Taxes (Appeals), Taxes Appeal Zone-1, Dhaka in the First Appeal No. 851/Circle-156/T.Z.- 8/16-17 against the assessment order dated 29.06.2016 passed by the Deputy Commissioner of Taxes, Tax Circle-156, Tax Zone-8, Dhaka.
6Facts, for the disposal of the reference application, in short, are that the applicant is a company limited by shares incorporated under the Companies Act, 1994 and it is the local office of the world renowned news outlet which has its head office in United Kingdom. The applicantcompany earns through gathering and broadcasting of news and an income tax payer bearing TIN-197458101877. The applicant submitted its income tax return for the assessment year 2013-2014 showing net loss of Tk.3,03,43,360/- which was assessed by the Deputy Commissioner of Taxes (in short, DCT) on 29.06.2016 under section 93/83(2) of the Income Tax Ordinance, 1984 (in short, the Ordinance) assessing total income Tk.91,05,653/- (Taka ninety one lac five thousand six hundred and fifty three) and demanded taxes at Tk.39,26,813/- (Taka thirty nine lac twenty six thousand eight hundred and thirteen).
7Challenging the said assessment order passed by the DCT, the applicant preferred an appeal before the Commissioner of Taxes (Appeals) {in short, CT (Appeals)}, Taxes Appeal Zone-01, Dhaka on the following two grounds:
8(1) That the DCT disallowed Tk.16,30,000/- on different heads of
9profit and loss account and ultimately treated that amount as
10income.
11(2) That the DCT considered as well as accepted addition of share
12money deposit of Tk.3,87,87,750/- as share equity in
13examination of balance sheet but at the same time that amount
14was treated by him as business receipt which was received as
15foreign remittance against equity investment in the applicant
16company.
17The CT (Appeals) after hearing the applicant-assessee, confirmed the order of the DCT by his order dated 31.07.2017.
18Being aggrieved by and dissatisfied with the appeal order dated 31.07.2017, the applicant preferred an appeal (second appeal) being I.T.A. No. 2448 of 2017-2018 before the Taxes Appellate Tribunal (in short, Tribunal). Thereafter, the Tribunal after hearing the parties passed an order dated 28.02.2018 where the Tribunal did not interfere with the order of the CT (Appeals) and the same was upheld.
19In the facts and the circumstances of the case, the assesseeapplicant filed the instant reference application before this Court under section 160(1) of the Ordinance for answering the following questions:
20I) Whether under the facts and circumstances of the case the
Tribunal was justified in upholding the order of the CT
(Appeals) so as to uphold disallowance of Tk.16,30,000/-
from the different heads of profit and loss account which
was allowable expenses under section 29 of the Ordinance
as well as holding Tk. 3,87,87,750/- as business
income/receipt in violation of section 28 of the Ordinance
since the said money is foreign remittance received as
equity injection;
21II) Whether under the facts and circumstances of the case the
Tribunal was justified in upholding the order of the CT
(Appeals) through its non-speaking order upholding DCT's
disallowance of Tk.16,30,000/- from the heads of allowable
expenses;
22III) Whether under the facts and circumstances of the case, the
Tribunal was justified in upholding the order of the
CT(Appeals) through its non-speaking order upholding
DCT's inclusion of Tk.3,87,87,750/- received by the
applicant as foreign remittance on share money deposit for
equity injection as business income in violation of the
provisions of the Ordinance;
23IV) Whether in view of section 28 of the Ordinance and on the
facts and circumstances of the case the Tribunal was
justified in upholding the order of the CT(Appeals)
upholding the addition of Tk.3,87,87,750/- to the total
income of the applicant as business income.
24The learned Counsel for the applicant submits that although the applicant filed the reference application formulating the above questions, if question No. (I) is answered then the other questions formulated in the reference application will automatically get its result.
25Mr. Kazi Ershadul Alam, the learned Counsel appearing for the applicant, took us through the order passed by the income tax authority. In this regard Mr. Alam submits that the Tribunal’s decision to disallow
Tk.16,30,000/- from various heads of the profit and loss account is absolutely whimsical, non-speaking, and arbitrary. Learned Counsel contends that the method of accounting was employed in accordance with section 35 of the Ordinance and that the statement of accounts comprising the profit and loss account and balance sheet was duly certified by a Chartered Accountant. Furthermore, bank statements and relevant supporting documents were produced, all of which confirm that these are allowable expenses under section 29 of the Ordinance. Despite this, the authorities disallowed the expenses without specifying or pinpointing any lack of supporting document.
26Mr. Alam further argues that the Tribunal merely upheld the findings of the CT (Appeals) and the DCT without providing any cogent reasons for its decision. Therefore, as a non-speaking order, the decision is liable to be set aside.
27Mr. Alam next submits that the order passed by the Tribunal confirming the order of the CT (Appeals) to uphold the addition of Tk. 3,87,87,750/- to the total income/receipt of the applicant as business income, is arbitrary and unlawful, in the regard Mr. Alam contends that section 28 of the Ordinance provides a list of income classified as 'income from business or profession which does not include money received as an equity injection.
28Mr. Alam then argues that the Tribunal committed an error of both law and fact by failing to appreciate that under section 19 or any other provision of the Ordinance, there is no scope to treat equity contributions from share holders as business income/receipt. Moreover, the DCT accepted the said remittance of Tk.3,87,87,750/- as an equity
contribution in the assessment order after examining and verifying the balance sheet with supporting documents. Therefore, the Tribunal’s decision is illegal and violates the applicable provisions of the Ordinance; as such, the order is liable to be set aside for the ends of justice.
29Ms. Sadia Afrin Shapla, learned Deputy Attorney-General appearing on behalf of the respondent-Government by referring to the decision in the case of Commissioner of Income-Tax, Dacca Zone, Dacca -vs- M/s Ata Hossain Khan Ltd., reported in 28 DLR (AD) 141 submits that there is no mandate upon the taxes authority to accept without question accounts audited by a Certified or Chartered Accountant. The requirement of law is that the income tax officer is to compute the profits upon such basis and in such manner as he may determine. Learned DAG further fortified her submission by reference to the decision in the case of Eskayef Bangladesh Ltd. -vs- Commissioner of Taxes, reported in 58 DLR (HCD)531, where it was held that "merely because a particular method of accounting was followed and was audited by a Chartered Accountant firm the same cannot be said to be sacrosanct when the expenditures were not verifiable.
30Learned DAG further submits that the order passed by the Tribunal, confirming the order of the CT (Appeals) to uphold the addition of Tk.3,87,87,750/-under section 28 to the total income/receipt of the applicant as business income is fair, lawful and justified in accordance with the provision of the Ordinance. The applicant-assessee misinterpreted the provision of law. The said amount is remittance income of the applicant, not the equity contribution. That’s why the said
amount was taken as business receipt/income under section 28 of the Ordinance.
31Learned DAG finally goes to argue that the grounds in reference application are defective, misleading and misconceived and not tenable in the eye of law and the questions raised in the reference application is liable to be answered in the form of affirmative i,e. against the applicant and in favour of the taxes department.
32We have considered the submissions of the learned Advocate for the applicant and the learned Deputy Attorney General for the respondent-Government and perused the reference application, supplementary affidavit filed on behalf of the applicant, affidavit-inreply and other materials on record.
33The main thrust of the argument on behalf of the applicant before this Court is that the applicant maintained a mercantile or "commercial" system of accounting under section 35(3) of the Ordinance and filed a return accompanied by audited statement of accounts, as the accounts had been audited by a firm of Chartered Accountants, that should have been accepted in the absence of any objection or finding under section 35(4)(a) or (b) of the Ordinance.
34To have a clear idea with regard to the legal implication of the provision of section 35 of the Ordinance, on the impugned action, we feel it expedient to reproduce that section here for ready reference which runs as follows:
35“35. Method of accounting.-
36(1) All income classifiable under the head "Agricultural income",
37"Income from business or profession’’ or "Income from other
sources" shall be computed in accordance with the method of accounting regularly employed by the assessee. (2) Notwithstanding anything contained in sub-section (1), the Board may, in the case of any business or profession, or class of business or profession, or any other source of income, or any class of persons or class of income, by a general or special order, direct that the accounts and other documents shall be maintained in such manner and form, and that payments of commercial transactions recorded in such manner, as may be prescribed or as may be specified in such direction; and thereupon the income of the assessee shall be computed on the basis of the accounts maintained, payments made and transactions recorded accordingly. (3) Without prejudice to the preceding sub-sections, every public or private company as defined in the Companies Act, 1913
38(VII of 1913) or কা ানী আইন, ১৯৯৪ (১৯৯৪ সেনর ১৮ নং আইন), shall, with the return of income required to be filed under this Ordinance for any income year, furnish a copy of the trading account, profit and loss account and the balance sheet in respect of that income year certified by a chartered accountant (4) Where — (a) no method of accounting has been regularly employed,
39or if the method employed is such that, in the opinion of
40the Deputy Commissioner of Taxes, the income of the
41assessee cannot be properly deduced therefrom; or
(b) in any case to which sub-section (2) applies, the assessee
fails to maintain accounts, make payments or record
transactions in the manner directed under that sub-
section; or
42(c) a company has not complied with the requirements of
sub- section (3);
43the income of the assessee shall be computed on such basis
44and in such manner as the Deputy Commissioner of Taxes
45may think fit.
46On a plain reading of the quoted provision of section 35 of the Ordinance, we find that the DCT is indeed empowered to reject an assessee's accounts. The power of the DCT to disallow books of account is discretionary, not absolute. It is a quasi-judicial function that must be exercised within the bounds of reason and fairness. Any rejection of accounts must be based on tangible defects and supported by a speaking order; otherwise, such an action constitutes an arbitrary exercise of authority that cannot withstand judicial scrutiny.
47The records of the instant case reveal that certain heads of claims made by the applicant were not accepted because supporting evidence were not submitted. It transpires from the materials on record that the disallowances made by the DCT were based on the fact that the claims were not verifiable through supporting documents. This is not a question of the acceptability of the accounting system itself, but rather a failure by the assessee-applicant to provide evidence supporting claims for allowances and deductions.
48The learned Advocate appearing for the applicant emphasized that the accounts presented to the tax authorities had been audited by a Chartered Accountant and, therefore, could not be questioned. We find such a submission unacceptable. Even accounts audited by a Chartered Accountant must be supported by primary evidence.
49In the case of Bangladesh Sugar and Food Industries Corporation and others -vs- Md. Shamsuddin Sheikh reported in 73 DLR (AD) 46, cited that, “Every decision is made on the facts and circumstances of a particular case and the decision is to be read along with the facts of that case.”
50It is to be noted here that when the DCT, in disallowing certain claims, noted that they were unacceptable due to the assessee-applicant's failure to provide details and evidence, it became incumbent upon the applicant to produce the requisite documentation. The reasons provided for rejecting the claims served as sufficient notice to the applicant to furnish supporting evidence.
51Upon perusing the record, it is clear that the CT (Appeals), in its appeal order dated 31.07.2017, rightly upheld the disallowances from the profit and loss accounts made by the DCT in its assessment order. Thereafter, considering the facts and circumstances of the case, the Tribunal maintained the order of the CT (Appeals), holding the view that, "the disallowances under several heads of expenses in the profit and loss accounts as confirmed by the learned C.T. (Appeals), for the reasons assigned in his order, are found to be fair and reasonable." However, from the order of the Tribunal, we do not find that the applicant produced any such evidence, even at the appellate stage. The Tribunal is
competent to decide all questions of fact and law and serves as the final arbiter of factual matters. In this regard, we find the tax authority's calculation to be tenable. We are of the view that we should not disturb the factual findings legally settled by the Tribunal.
52In the case of Commissioner of Taxes -vs- Conference and Exhibition Management Service Ltd. reported in 25 BLC (AD) 15, held that,
“When the tax authority indicates that any claims are
disallowed on account of lack of verifiable evidence, it is
incumbent upon the assessee to satisfy the tax authority by
providing necessary supporting evidence. The provision in
section 35(3) of the Ordinance, does not exonerate the
assessee from supplying evidence in support of the claims
for allowances/deductions.”
53It is our view that while section 35(3) of the Ordinance directs the applicant to furnish a trading account, a profit and loss account, and a balance sheet certified by a Chartered Accountant, such certification does not dispense with the requirement to produce evidence in support of the claims made therein.
54For the reasons and discussions set forth above, and upon considering the relevant legal provisions and judicial precedents regarding the disallowance of expenses, we find no merit in the applicant's contention.
55The applicant disclosed share capital (share money deposit) Tk. 72,100/- as on 31 March, 2012 and Tk.3,88,59,850/- as on 31 March, 2013 in its balance sheet, that is an increase of share money deposit of
Tk.3,87,87,750/- which was reflected in the statement of accounts audited by a Chartered Accountant’s firm namely M. Z. Islam & Co. for the assessment year 2013-2014 and submitted income tax return which was assessed by the DCT under section 93/83(2) of the Ordinance. In its profit and loss account, the applicant declared revenue (receipt/income) of Tk. 2,69,295/- under section 28 of the Ordinance. But at the time of assessment, the DCT assessed revenue (receipt/ income) total Tk.3,90,57,040/- in place of Tk.2,69,295/- as under:
56B−ul Evpx hÉhp¡ qC−a Bu (pwh¡c f¢l−hn−el j¡dÉ−j Bu fÊ¡¢ç) Llc¡a¡ ®L¡Çf¡e£l 2013-2014 Llh−oÑ fС¢ç J MlQ ¢ejÀl¦fi¡−h fkÑ¡−m¡Qe¡ Ll¡ q−m¡x
57Hp Hp Hm ®VL ¢mx q−a fС¢ç V¡x 44,095/-
58Hp Hp ¢X JuÉ¡l−mp q−a fÊ¡¢ç V¡x 2,25,200/-
¯h−c¢nL AbÑ fС¢ç- V¡x 3,87,87,750/-
Bu V¡x 3,90,57,040/-
59The DCT without specifying any reason in a slip short manner assessed ¯h−c¢nL AbÑ fС¢ç V¡x ৩,৮৭, ৮৭,৭৫০/- on its income.
60To have a clear idea with regard to the legal implication of the definitions of 'business' and 'income' under clauses (14) and (34) of section 2 and provisions of section 28 of the Ordinance, we feel it expedient to reproduce those provisions here which run as follows:
612(14) "business" includes any trade, commerce or manufacture or
any adventure or concern in the nature of trade, commerce or
manufacture;
622(34) "income" includes-
(a) any income, profits or gains, from whatever source
derived, chargeable to tax under any provision of this
Ordinance under any head specified in section 20;
(b) any loss of such income, profits or gains;
(c) the profits and gains of any business of insurance carried
on by a mutual insurance association computed in
accordance with paragraph 8 of the Fourth Schedule;
(d) any sum deemed to be income, or any income accruing
or arising or received, or deemed to accrue or arise or be
received in Bangladesh under any provision of this
Ordinance:
63Provided that the amount representing the face value of any bonus share or the amount of any bonus declared, issued or paid by any company registered in Bangladesh under কা ানী আইন, ১৯৯৪ (১৯৯৪ সেনর ১৮ নং আইন) to its shareholders with a view to increase its paid-up share capital shall not be included as income of that share holder;
6428. Income from business or profession.-
65(1) The following income of an assessee shall be classified
and computed under the head "Income from business or
profession", namely:-
(a) profits and gains of any business or profession carried on,
or deemed to be carried on, by the assessee at any time
during the income year;
(b) income derived from any trade or professional
association or other association of like nature on account
of specific services performed for its members;
66(c) value of any benefit or perquisite, whether convertible
67into money or not, arising from business or the exercise
68of a profession;
69(d) the amount, the value of the benefit and the trading
70liability referred to in section 19(15);
71(e) the excess amount referred to in section 19(16), (f) the excess amount referred to in section 19(18);
72(g) the sale proceeds referred to in section 19(20);
73(h) the amount of income under section 19(23).
74Explanation.- Where speculative transactions carried on by an assessee are of such a nature as to constitute a business, the business (hereinafter referred to as "speculation business") shall be deemed to be distinct and separate from any other business. (2 ) Notwithstanding anything contained in this Ordinance,— (a) the profits and gains of any business of insurance and the
75tax payable thereon shall be computed in accordance with
76the provisions of the Fourth Schedule;
77(b) the profits and gains from the exploration and production
78of petroleum (including natural gas) and the tax payable
79thereon shall be computed in accordance with the
80provisions of Part A of the Fifth Schedule;
81(c) the profits and gains of any business which consists of, or
82includes, the exploration and extraction of such mineral
83deposits of a wasting nature (not being petroleum and
84natural gas) as may be specified in this behalf by the
Government, carried on by an assessee in Bangladesh
shall be computed in accordance with the provisions of
Part B of the Fifth Schedule.
85(3) Notwithstanding anything to the contrary contained in any
other provisions of this Ordinance, in the case of
Bangladesh Shilpa Bank, Bangladesh Shilpa Rin
Sangstha, Investment Corporation of Bangladesh, and any
commercial bank including the Bangladesh Krishi Bank
and Rajshahi Krishi Unnayan Bank, the income by way of
interest in relation to such categories of bad or doubtful
debts as the Bangladesh Bank may classify in the income
year in which it is credited to its profit and loss account
for that year or, as the case may be, in which it is actually
received, whichever is earlier.
86On a plain reading of the definitions of 'business' and 'income' and provisions of section 28 of the Ordinance, we find no statutory basis to add foreign remittances received as share money deposit to an assessee's revenue or income. Furthermore, the DCT provided no explanation or legal reasoning in the assessment order for treating the foreign remittance received for share money equity of Tk.3,87,87,750/- as business income (revenue/receipt) under section 28 of the Ordinance.
87On the other hand, at the time of assessment, the DCT examined the balance sheet and considered the previous share equity of Tk.72,100/- and the subsequent increase in share money equity of Tk. 3,87,87,750/-, totaling Tk. 3,88,59,850/-, in the following manner:
88w¯’wZcÎ ch©v‡jvPbv t
891| w¯’wZcÎ ch©v‡jvPbv Kiv n‡jv| ch©v‡jvPbvq †`Lv hvq †h, †kqvi BKzBwU cÖ`k©Y
90Kiv n‡q‡Q Uvt 3,88,59,850/-| c~e©eZ©x Kie‡l© †kqvi BKzBwU wQj Uvt 72,100/-
91| we‡eP¨ Kie‡l© †kqvi gvwb BKzBwU e„w× †c‡q‡Q Uvt 3,87,87,750/-| Ki`vZv
92†Kv¤úvbx cÖ`wk©Z BKzBwU †kqv‡ii mg_©‡b GbK¨vk‡g›U mvwU©wd‡KU Gi Kwc I e¨vsK
93weeiYx `vwLj K‡ib hv ch©v‡jvPbv Kiv n‡jv| ch©v‡jvPbvq cÖ`wk©Z †kqvi BKzBwUi
94welqwU †g‡b †bIqv n‡jv|
95The appeal order was passed by the CT (Appeals) in Appeal No. 851/Circle-156/Taxes Zone-8/2016-17, dated 31.07.2017 wherein the assessment order of the DCT was upheld in a slipshod manner as follows:
“3 bs AvcwË t ‰e‡`wkK A_© c«vwß 3,87,87,750/= UvKv‡K Avq wnmv‡e
we‡ePbv Kivi weiƒ‡×|
AvqKi bw_ ch©v‡jvPbvq †`Lv hvq Ki`vZv-†Kv¤úvbx msev` cwi‡ekb K‡i
Avq cÖvß nq| Av‡jvP¨ Kie‡l© Ki`vZv †Kv¤úvbx ‰e‡`wkK A_© cÖvwß
3,87,87,750/= UvKv‡K Avq wnmv‡e we‡ePbv K‡i‡Qb| AvqKi bw_
ch©v‡jvPbvq we‡`k n‡Z c«vß A_©‡K Avq wnmv‡e MY¨ Kivi Kvh©µg h_vh_
c«Zxqgvb nIqvq envj ivLv n‡jv|Ó
96Thereafter, the appeal (second appeal) order was passed by the Tribunal in I. T. A. No.2448 of 2017-2018, dated 28.02.2018 wherein the appeal (first appeal) order of the CT (Appeals) was upheld as follows:
“We have heard both the sides, perused the records and
97gone through the order of the authorities discussed above. At the
98time of hearing before tribunal learned A.R. could not produce
99any evidence to controvert the order of learned C.T. (Appeals).
100So, considering the facts and circumstances of the case, we are of
101the view that the decision of the learned C.T. (Appeals) regarding
102receipts was just and proper. Hence, we decided very judiciously
103not to interfere with the order of the learned C.T. (Appeals) and
104the same is upheld. Therefore, the ground taken by the assessee
105for both the assessment years fails.”
106We have perused the provisions of sub-sections (2) and (4) of section 19, under which an investment may be treated as income and subsequently classified under the head 'Income from other sources.' For the sake of clarity, the relevant provisions of section 19 of the Ordinance are quoted herein below: 19. Un-explained investments, etc., deemed to be income. —
10719(2) Where, in any income year, the assessee has made
108investments or is found to be the owner of any bullion, jewellery
109or other valuable article and the Deputy Commissioner of Taxes
110finds that the amount expended on making such investments or in
111acquiring such bullion, jewellery or other valuable article exceeds
112the amount recorded in this behalf in the books of account
113maintained by the assessee for any source of income and the
114assessee offers no explanation about the excess amount or the
115explanation offered is not, in the opinion of the Deputy
116Commissioner of Taxes, satisfactory, the excess amount shall be
117deemed to be the income of the assessee for such income year
118classifiable under the head "Income from other sources".
11919(4) Where, in the financial year immediately preceding the
120assessment year, the assessee has made investments which are not
recorded in the books of account, if any, maintained by him for
121any source of income, and the assessee offers no explanation
122about the nature and source of fund for the investments, or the
123explanation offered is not, in the opinion of the Deputy
124Commissioner of Taxes, satisfactory, the value of the investments
125shall be deemed to be the income of the assessee for such financial
126year classifiable under the head "Income from other sources".
127We have minutely examined the provisions of sub-sections (15), (16), (18), (20) and (23) of section 19 of the Ordinance also. A plain reading of the aforementioned provisions reveals that where an excess investment is found, or where an investment has been made and that is not recorded in the books of accounts, and the assessee offers no explanation regarding the nature and source of the funds or the explanation offered is unsatisfactory the excess value or the value of the investment, as the case may be, shall be deemed to be the income of the assessee for that financial year, classifiable under the head 'Income from other sources.' We find no provision of law that allows for the determination of foreign currency invested as a 'share money deposit' as income under section 28 of the Ordinance.
128In the instant case, the applicant invested foreign currency as a share money deposit and produced bank statements, remittance papers, and other relevant documents. These were examined and accepted by the DCT in the assessment order while evaluating the balance sheet, however, the DCT treated the same amount as revenue (receipt/income) in the profit and loss account without any lawful justification. Both the lower appellate authorities failed to apply their judicial minds. While the
Tribunal is competent to decide all questions of fact and law and serves as the final arbiter of factual matters, the legal aspects were entirely ignored. Furthermore, the first appellate order of the CT (Appeals) is highly unsatisfactory and does not constitute a speaking order.
129For the reasons and discussions set forth above, and considering the facts and relevant legal provisions, we are of the view that the Income Tax Authority acted beyond the scope of the law. Accordingly, we find merit in the last part of the reference application.
130Therefore, it is ordered that the question formulated in the income tax reference application, the first part is answered in the form of affirmative and in favour of the respondent and the last part is answered in the form of negative and in favour of the applicant-assessee.
131Accordingly, the income tax reference application succeeds in part.
132However, there shall be no order as to costs.
133The rule so far it relates to demand is disposed of and the interim order of stay granted earlier by this Court is hereby recalled and vacated.
134The Registrar, High Court Division of Supreme Court of Bangladesh is directed to take steps under section 161(2) of the Income Tax Ordinance, 1984 read with section 294(2) of the Income Tax Act, 2023. S.M. Maniruzzaman, J
I agree
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Our advocates appear before both divisions of the Supreme Court. These are the practice areas that handle matters like this one.
- Supreme Court practice in BangladeshSlips, mentioning, cause lists and appearances→
- Case JourneysHow a case moves through the courts, step by step→
- Limitation and appeal deadline calculatorKnow your last day to file→
- Curative petitions in BangladeshFinality, article 104 and the case for reform→
- Constitution guideEvery article and amendment, animated→
- Bangladesh legal glossaryBangla and English legal terms, explained→
