Law: Income Tax Ordinance, 1979

Section: 16(2),24(i),136(1),23&ThirdSched

(a) Income Tax Ordinance (XXXI of 1979)---Ss. 16(2), 24(i) & 136(1)---Reference to High Court---Perquisites---Salary---Cash awards paid by assessee to its employees on basis of their individual performance---Order of Assessing Officer treating such awards as perquisites---Order of Appellate Authority treated such awards as part of perquisites for same having been paid to employees not in terms of appointment---Order of Tribunal treating such awards as part of salary and not as perquisites---Validity---Record showed that such awards were paid on basis of individual performance and not in accordance with terms of employment---Term "salary" as defined in S.16 of Income Tax Ordinance, 1979 included a number of payments to be considered as part of salary---Wherever term "include" was used, intention of legislature would be to give same widest possible meaning---Definition of term "salary" was wide enough, thus, such awards, though not included therein, would fall therein---Such awards had been paid as incentive to employees, which was exclusive decision of management, thus, same could not be considered to be perquisite to an employee---Such award would fall under S. 16(2)(a)(ii) as part of salary and not as part of perquisites--- High Court upheld order of Tribunal in circumstances. (b) Interpretation of statutes--- ----Term "include" used in definition clause of a statute---Scope---Intention of legislature by using such term would be to give same a widest possible meaning. (c) Income Tax Ordinance (XXXI of 1979)--- ---S. 23 & Third Sched.---Expenditure incurred on repair, renovation and alteration---Nature---Such expenditure, if not resulted in creation of any capital asset, but appeared to be that of current repair only would usually fall under head of current repair and would be treated as capital expenditure---Principles. Girdhari Dass and sons v. Commissioner of Income Tax (1976) 105 ITR 339; Commissioner of Income Tax, East Pakistan, Dacca v. Gulistan Cinema Company, Dacca (1968) 17 Taxation 209); I.T.A. No.39/HQB of 1989-90; 1966 PTD (Trib.) 80; Sui Southern Gas Company Ltd. v. Commissioner of Income Tax 2000 PTD 3741 and Commissioner of Income Tax v.…

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