Law: Income Tax Ordinance, 1979

Section: 23(1)(xviii)

Keywords: Result: Order accordingly JUDGMENT ' IRFAN SAADAT KHAN, J. - This Income Tax Reference (I.T.R) has been filed against the order 21.06.2002 passed by the Income Tax Appellate Tribunal, (ITAT) in R.A. No, 221/KB of 2002, pertaining to assessment year 1993-94, under Section 136(1) of the repealed Income Tax Ordinance, 1979 (hereinafter referred to as Ordinance, 1979), by raising the following question of law:- Whether on the facts and in the circumstances of the case the learned ITAT was justified in directing for allowance of Corporate Assets Tax as an expenses: allowable u/s. 23 of the, Income Tax Ordinance, 1979 as against the income of the assessee when the same was capital in nature and not exclusively incurred for earning the profit ?" lt;'i gt; 2. Briefly stated the facts of the case are that the respondent is a public limited company and is engaged in the manufacturing and 'sale of yarn of all types. The return for the assessment year 1992-93 was filed on 31.7.1993 by declaring an income of Rs, 11,482,367/-. The income pertaining to export sales was declared under Section 80-CC of the Ordinance, 1979 being full and final discharge of the tax liability. Subsequently, the return was revised on 1.9.1993 by declaring an income of Rs, 14,350,788/-. It was explained that the return was revised in the light of C.B.R. Circular No, 14 of 1992, dated 19.8.1993, whereby it was directed that the export sales for the period of 1.7.1992 to 30.9.1992 were to be restricted Cinder Section 80 CC of the Ordinance, 1979 and the remaining export sales pertaining to the period 1:10.1992 to 30.6.1992 were to be considered alongwith the local sales. The return was accompanied with audited statement of accounts. The Deputy Commissioner of Income Tax, Circle C-6, COS-1,Karachi (DCIT) issued notice under Section 61 of the Ordinance, 1979, in response to which, Mr. Selman Pasha, Advocate appeared alongwith the Chief Accountant of the company. The matter was examined at length and vide assessment order dated 31.8.1994, the income of the respondent was determined at Rs, 18,311,357/-. An appeal against the said order was thereafter filed before the Commissioner of Income Tax…

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