ISLAMABAD: Though Aleema Khan, while admitting ownership of her New Jersey flats, has stated that she has a business of textile which had exports of billions per year, FBR tax record of her business for the corresponding years in which luxurious foreign properties were purchased in UAE and USA belies her claim.
Starting from 1995 until 2010 when all these luxurious foreign properties were acquired, the year-wise examination of income and taxes paid by her only business, 50 percent shares in Cotton Connection Pvt Ltd (CCL), at that time and taxes paid by her on her personal income shows that she had hardly any money to make a good investment even here in Pakistan.
The USA property in New Jersey was purchased by Aleema Khan on August 5, 2004, in the financial year 2004-05, the business CCL paid a total tax of Rs188,721 in this year. The total annual profit of this business was to be divided between two shareholders, Aleema Khan and her business partner. Aleema Khan’s own tax in this financial year was only Rs49,914.
According to SECP record, Aleema Khan remained shareholder (50 percent shares while rest of the 50 percent shares were owned by her business partner) and director in Cotton Connections Pvt Ltd (registration No-0020378) and she was director of entities Saarc Business Association For Home Based Workers (Guarantee) Ltd (registration No-0069841, date: June 26, 2009) and Pakistan Compliance Initiative (registration No-0045197 date: April 8, 2003). At present, she is CEO of Cotcom Sourcing Pvt Ltd (registration No-0071323 date: January 14, 2010) in which her sons Shahrez Azeem Khan and Shershah Khan are directors.
Official documents establish that Aleema’s only business in 1990s and 2000s was Cotton Connections Pvt Ltd. Here is the year-wise breakup of taxes paid by Cotton Connections Pvt Ltd (CCL) from 1995 to 2010 and Aleema’s own taxes in the relevant years of purchase of foreign properties. While going through these tax details, the readers need to keep in mind that the profit declared by the business is combined profit of two shareholders. Readers should also differentiate between situations when the profit was declared and when in accordance with FBR requirements, the annual turnover was declared instead mentioning profit.
Total profit/income of Cotton Connections Limited (CCL) was declared as Rs696,107 and tax paid was Rs1880.
Total profit/income of CCL was declared as Rs617,591 and tax paid was Rs19,149.
Total profit/income of Cotton Connections Limited (CCL) was declared as Rs175,688 and tax paid was Rs52,452.
Total profit/income of CCL was declared as Rs79,733 and tax paid was Rs19,452.
Total income of CCL was declared as Rs104,335 and tax paid was Rs49,501. However, because of payments of Rs29,690 under U/S 50 and Rs254,576 under U/S 53 already made to tax authorities and refunds total profit was shown at Rs292,309.
Format of the tax forms was changed in this financial year and instead of declaring profit and paying tax on profits, the businesses were supposed to declare total turnover and pay tax on it according to the defined ratio.
CCL declared total turnover of exports as Rs12,094,835 for this financial year and total tax paid was Rs60,474. Comparing the tax amount in this financial year with the tax paid during the preceding financial year, one can have an idea about the profits made in this this financial year. The profit was obviously to be divided among two equal shareholders of the company thus leaving nominal amount with Aleema Khan.
Similarly in 2001-02, according to the new format of tax forms, the total turnover of exports of CCL was declared as Rs19,110,122. Total tax paid was Rs143,326.
(Total deductions on exports proceeds and other taxes already paid stood at Rs201,691 and tax payable was Rs143,326 so refund of Rs58,365 was claimed.)
According to the new format of the tax forms, total turnover of exports of CCL was shown which was declared at Rs20,967, 771. Total tax paid was Rs157,528.
(Total deductions on exports proceeds and other taxes already paid stood at Rs237,649 and tax payable was Rs157,528 so refund of Rs80,391 was claimed.)
2003-04: (CCL & Aleema Khan)
Total turnover of exports of CCL was declared as Rs32,695,322. Total tax paid was Rs245,215.
(Total deductions on exports proceeds and other taxes already paid stood at Rs353,849 and tax payable was Rs245,215 so refund of Rs108,634 was claimed.)
Tax record of Aleema Khan available with The News from this financial year onward shows following details of her personal taxes and her total income. By going through her total income and taxes paid by her and her business in preceding and following years, readers can decide by themselves whether Aleema Khan could have bought luxurious properties in UAE and USA.
In this financial year (2003-04), Aleema Khan paid Rs51,091 tax and declared taxable salary income from her business was Rs480,000 (Rs40,000 per month) while she also claimed an income of Rs1,700,385 as exempted from tax. She paid Rs632 as zakat on her total income in this year.
2004-05: (CCL & Aleema Khan)
Total turnover of exports of CCL was declared as Rs25,162,794. Total tax paid by the business CCL was as low as Rs188,721.
(Total deductions on exports proceeds and other taxes already paid stood at Rs260,223 and tax payable was Rs188,721 so refund of Rs71,502 was claimed.)
Aleema Khan paid Rs49,914 as her personal tax in this financial year and declared her taxable salary income from her business was Rs480,000 (Rs40,000 per month). No income was claimed to be exempted from the taxes. She paid Rs470 as zakat on her income in this year.
In this financial year, Aleema Khan bought US property in New Jersey in August 2004.
2005-06: (CCL & Aleema Khan)
Total turnover of exports of CCL was declared as Rs38,661,583. Total tax paid was Rs314,882. (Total deductions on exports proceeds and other taxes already paid stood at Rs378,169 and tax payable was Rs314,882 so refund of Rs63,287 was claimed.)
Aleema Khan paid Rs47,434 tax in this year and declared taxable salary income from her business was Rs480,000 (Rs40,000 per month). No income was claimed to be exempted from the taxes. She paid Rs282 as zakat on her income in this year.
2006-07: (CCL & Aleema Khan)
Total tax paid by CCL was Rs188,721 only. The amount of exports turnover is illegible but one can have an idea by comparing tax paid this year with that paid during the preceding year.
In this financial year, Aleema Khan paid Rs79,875 tax and her declared income was Rs887,500 (Rs73,958 per month).
Total turnover of exports of CCL was declared as Rs89,487,110. Total tax paid was Rs812,904.
Aleema Khan’s tax record for this year couldn’t be retrieved.
2008-09: (CCL & Aleema Khan)
Total turnover of exports of CCL was declared as Rs70,443,857. Total tax paid was Rs704,439
Aleema Khan paid Rs147,137 tax in this year and declared her total annual salary income Rs1,007,500 while agriculture income was shown at Rs535,583.
2009-10: (Aleema Khan – CCL went down)
CCL didn’t file returns as the business dispute started and litigation was started in Lahore High Court and Aleema Khan got new company CotCom Sourcing registered on January 14, 2010.
In this financial year, Aleema Khan paid Rs106,590 tax and declared Rs960,000 as her salary income while Rs535,583 as agriculture income.
In 2010-11, Aleema Khan paid Rs107,848 tax and declared Rs920,000 as her salary income while Rs500,000 as agriculture income. In 2011-12, Aleema Khan paid Rs188,000 tax and declared Rs1,520,000 as her salary income while Rs500,000 as agriculture income. In 2012-13, Aleema Khan paid Rs140,000 tax and declared Rs1,800,000 as her salary income while Rs600,000 as agriculture income. In 2013-14, Aleema Khan paid Rs158,900 tax and declared Rs1,908,000 as her total income. In 2014-15, Aleema Khan paid Rs186,620 tax and declared Rs2,066,400 as her total income. In 2015-16, she paid Rs130,794 tax in in this financial year.
And then came the Panama Papers revelations in April 2016 following which The News sent questions to Aleema Khan about her foreign properties in UAE, UK and USA and instead of responding questions, she started selling her foreign properties. She didn’t’ even feel the need to declare the properties which were sold out but now facing a case regarding her undeclared and sold-out UAE property which she has to admit before tax authorities of Pakistan. Only in case of New Jersey property, Aleema Khan was unable to sell it as it was jointly owned by her and her former business partner and her business partner was not ready to sell the same because of a business dispute. Following this, Aleema declared her 75 percent share in New Jersey property through Tax Amnesty Scheme 2018 (Whitening of Black Money Scheme) as after The News questions, a legal action against her hidden and unsold foreign properties was imminent. An investigation about her other sold out undeclared foreign properties is also in progress.
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