Law: Income Tax Act, 1922

Section: 25,25(1),10(2)(xvi),10(4)(bb),18(3BB)

[Income Tax Act, 1922 (XI of 1922)].......Section 25(1)-Discontinued business-Non-resident company-Contract for construction of building in Pakistan-In terms of agreement assessee company charged with maintenance of building for one year subsequent to the year of construction-Return of income filed for the first and subsequent years-Whether business discontinued after construction of building-Held no Section 25(1) is clearly attracted in a case where any business is discontinued in any year and in such case the assessment would for that year be made on the basis of income, profits and gains of the period between the end of the previous year. The previous year of the appellant in the instant case ended on 31-12-1972 and return for this year was duly Sled. It is true that the main contract of the appellant was completed by 31-12-1972, but the case of the appellant was that it was charged with the duty of maintaining the building for another year and thus the business was not altogether discontinued. As already stated the appellant in fact filed returns for two subsequent years also. Now, if as contended by the appellant, it was in its terms of the contract charged with the maintenance of the building for another year it cannot be properly asserted that the appellant's business had altogether ceased. Of course after completion of the building the business was confined to execution of minor works carried on a very limited scale but to say that it was altogether discontinued would be factually incorrect. The provisions of Section 25(1) were, there-fore, not attracted to the facts of this case and the impugned assessment should be taken to have been made under Section 23(3) of the Income Tax Act. B. Income Tax Act, 1922 (XI of 1922)-Sections 10(2)(xvi), 10(4)(bb), 18(3BB)-Business expenditure-Non-resident-Insurance premia Payment of insurance premia of non-resident-Whether admissible expenditure-Held yes-Provisions of Section 18(3BB)-Whether applicable-Held no-Income Tax Rules, r. 50-Central Board of Revenue Circular No. 10 of 1974. C. Income Tax Act, 1922 (Xl of 1922)-Section 10(2)(xvi)-Business expenditure-Non-resident company-Head office expenses-Whether…

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