Law: Income Tax Ordinance, 2001

Section: 120,120(1),122(5A)&122(9),-SecondSched.,

Law: Workers Welfare Fund Ordinance, 1971

Section: 4

(a) Income Tax Ordinance (XLIX of 2001)----Second Sched., Part-I, Cl.(74), Ss. 120(1), 122(5A) & 122(9)---Exemption---Term deposits---Bank deposits---Taxpayer contended that tax was levied on exempt profit on debt by treating the profit attributable to call and term deposits treating the same outside the scope of exemption; and exemption under Cl.(74) of Part-1 of Second Schedule to the Income Tax Ordinance, 2001 was wide enough to include both profit on debt from bank accounts as well as from bank deposits---Revenue contended that term/call deposits were typically deposits held at a financial institution for a fixed term; and when a term deposit/call deposit was opened, the lender (customer) understands that the money could only be withdrawn after the term ended or by giving notice for a pre-determined number of days; and terms deposits/call deposits being time specific, the funds in such deposits were not utilized in the operation of the company/project and profit earned as such deposit was not entitled to exemption and claiming the entire interest income as exempt had rendered the assessments as erroneous and prejudicial to the interest of revenue---Validity---Clause (74) of Part-I of Second Schedule to the Income Tax Ordinance, 2001 did not cover "term deposits" for the purpose of exemption from income tax as the "term deposits" being time bound were not directly connected with financial transaction relating to the project operations and was ousted from the purview of Cl.(74) of Part-1 of Second Schedule to the Income Tax Ordinance, 2001---Clause (74) of Part-1 of Second Schedule to the Income Tax Ordinance, 2001 provided exemption only to "bank deposits" relating to routine business operation of the company and not either long term deposits---Exemption provisions were to be strictly construed---Had the intention of the legislature been to extend exemption to entire profit on debts and interest income, the words "bank deposits" would have not been expressly provided in Cl.(74) of Part-I of Second Schedule to the Income Tax Ordinance, 2001---Profits or interest earned on debts were covered under presumptive tax regime and there was no substance in the…

Deprecated: trim(): Passing null to parameter #1 ($string) of type string is deprecated in /home/digixyei/sldsystempk.com/view/master-layout/view_case.php on line 492