Law: Income Tax Act, 1922

Section: 18A,45A,15BB,18A(1)(3),3,23,67B

Income-tax Act, 1922 -- Sections 15BB, 18A, 18A(1) -- Tax Holiday Company -- Voluntarily giving up concession of tax holiday for gaining some advantage -- Whether should face certain liabilities under the normal law -- Held yes -- Advance tax -- Finance Act, 1968 prescribing prospective rates for 1968-69 and 1969-70 -- Advance tax for the previous year corresponding the assessment year 1968-69 -- Whether payable at the rates prescribed by the Finance Act, 1967 and not the Finance Act, 1968 -- Held yes -- Advance payment of Tax -- Assessee, enjoying tax-holiday under section 15BB, renouncing that concession under Martial Law Regulation No. 32 -- Subjected to all liabilities to which non-tax-holiday tax payer is subjected to -- Obligations include payment of advance tax under section 18A -- ORDER The order was passed by M.T. SIDDIQUI, President}.--- These three appeals by a private limited company, exporting sports goods, raise a number of common objections against certain add backs and also object to the validity of the penal interest and add tax imposed under the relevant provisions of Section 18-A and 45-A of the Income-tax Act. 2. We will first deal with the various additions. The first common objection about the add backs concerns the packing charges which were disallowed to the extent of Rs. 3,000. Rs. 10,000 and Rs. 15,000 respectively for the three years under appeal for lack of verification. The appellant's case is that all these expenses are verifiable as these were incurred through the clearing agents. In this view of the matter these disallowances will have to be deleted. 3. The second objection for the year 1970-71 concerns a disallowance of Rs. 5,000 out of the travelling expenses claimed to the extent of Rs. 22,890. The appellant's case is that all these expenses were incurred in connection with the appellant's foreign tours in order to promote the export of its goods. The expenses mostly comprised of air tickets, freight and the exchange sanctioned by the State Bank of Pakistan. Therefore, there is little justification for any disallowance out of the these expenses. The learned Departmental Representative could not rebut these categorical…

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