Law: Income Tax Ordinance, 2001

Section: 23(1)(v),107,Third Schedule,R.8(8)(b)

(a) Taxation---.--- ---.----'Tax credit'---.---Meaning---.---Tax credit was an incentive or relief given to the taxpayer, usually for the purposes of promoting certain industries or activities. (b) Taxation---.--- ---.----'Tax credit'---.---Definition. Black's Law Dictionary (9th Ed.); P. Ramanatha Aiyar's Concise Law Dictionary (4th Ed.) and The Oxford Advanced Learner's Dictionary of Current English (8th Ed.) ref. (c) Taxation---.--- ---.----'Tax credit'---.---Scope---.---Tax credit was an amount which was directly offset against or adjusted/deducted from the tax liability and not the gross income. (d) Words and phrases---.--- ---.----'Exclude'---.---Meaning. Chambers 21st Century Dictionary (2007) and The Oxford Advanced Learner's Dictionary of Current English (8th Ed.) ref. (e) Income Tax Ordinance (XXXI of 1979) [since repealed]---.--- ---.----Ss. 23(1)(v), 107 & Third Sched., R. 8(8)(b)---.---Tax credit for replacement, balancing and modernisation of machinery or plant---.---Scope---.---Depreciation allowance, computation of---.---Tax credit available under S. 107 of the erstwhile Income Tax Ordinance, 1979 (the Ordinance)---.---Said tax credit was a deduction albeit from the tax payable and being admissible under the Ordinance it clearly fell within the ambit of R. 8(8)(b) of the Third Schedule to the Ordinance---.---Tax credit available under S. 107 of the Ordinance did fall within the purview of R. 8(8)(b) of the Third Schedule to the Ordinance and thus was to be excluded (i.e. not to be considered) while computing the actual cost of an asset when determining the written down value thereof for the purposes of calculating depreciation allowance. Gulshan Spinning Mills Ltd. and others v. Government of Pakistan and others 2005 PTD 259 distinguished. THIS ORDER PASSED BY: MIAN SAQIB NISAR, CHIEF JUSTICE---.--- The question before this Court is whether tax credit(s) available under section 107 of the erstwhile Income Tax Ordinance, 1979 (the Ordinance) were to be excluded while computing the actual cost of an asset in order to determine it's written down value for the purposes of calculating…