Law: Income Tax Ordinance, 2001

Section: 53(1)(a),161

THIS ORDER PASSED BY: NAZIR AHMAD, CHAIRMAN:---.--- The appeal has been filed by the taxpayer against the Order-In-Appeal No. 1145/2017 dated 09.05.2017 passed by the Learned Commissioner Inland Revenue (Appeals-I), Islamabad for the tax year, 2015 on the following grounds: Grounds 1. The Commissioner Inland Revenue (Appeals-I), Islamabad has further erred in upholding the action of the learned Deputy Commissioner Inland Revenue, Unit-XXIV, Zone-IV, LTU, Islamabad in levying income tax under section 153 read with section 161 of the Ordinance without considering the fact that such expenses include reimbursement of expenses to the company's employees which do not constitute payment on account of supply of goods, or for services rendered, or the execution of contract in respect of following heads: Particulars Amounts Rs Income tax Rs Under section Travelling and conveyance 193,904,994/- 3,878,100/- 153(1)(b)/161 Repair and maintenance 805,591/- 64,447/- 153(1)(a)/161 Total amount Rs. 194,710,585/- Rs. 3,942,547/- 2. Without prejudice to the above, the Commissioner Inland Revenue (Appeals-1), Islamabad has also erred in upholding the action of the learned Deputy Commissioner Inland Revenue LTU, Islamabad in levying income tax under section 153 read with section 161 of the Ordinance without considering the fact that payments in respect of "Repair and Maintenance" being below the taxable limit of Rs.25,000 are exempt from tax withholding under SRO No.586(I)/91 dated June 30, 1991. 3. The Commissioner Inland Revenue (Appeals-1), Islamabad has also erred in upholding the action of the learned Deputy Commissioner Inland Revenue LTU, Islamabad in levying income tax under section 153 read with section 161 of the Ordinance in respect of professional charges and other indirect expenses amounting to Rs.4, 219,062/- and Rs. 4,417,721/- respectively to the third party vendor [Abacus Els (Private) Limited in view of exemption certificates issued to it by the Commissioner Inland Revenue , Zone-II, RTO, Lahore vide exemptions certificates No.1652/J and J-208. 2. Brief facts of the case are that the taxpayer a private limited company, deriving income from other "Information…

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