Law: Income Tax Ordinance, 2001

Section: 133(1),133(5),161

Law: Income Tax Ordinance, 1979

Section: 12(19),32

Income Tax Ordinance (XLIX of 2001)- Ss. 133(1) ,  161- Income Tax Ordinance (XXXI of 1979), S. 12(19)- Lease rental income- Scope- Dispute was with regard to assessment of lease rental income under S. 12(19) of Income Tax Ordinance, 1979 on actual receipt basis and not on accrual basis-  Validity- Assessee could not claim depreciation, initial and normal and simultaneously seek exclusion of receivable rentals from the ambit of deemed income- Lease rentals under S. 12(19) of Income Tax Ordinance, 1979, were received and receivables and were to be deemed income of assessee to be accounted for while submitting return of income- High Court set aside passed by Appellate Tribunal Inland Revenue and matter was remanded for decision afresh by the Tribunal- Reference was allowed, in circumstances. Commissioner of Income Tax v. Grays Leasing Ltd., Lahore 2020 PTD 153 ref. ORDER: This Tax Reference and connected reference applications bearing PTR No.355 of 2008, PTR No. 360 of 2008 and PTR No.361 of 2008 are directed against consolidated order dated 14.06.2007 of the learned Income Tax Appellate Tribunal (Appellate Tribunal). Reference applications relate to the Assessment Years 1999-2000, 2000-2001, 2001-02 and 2002-2003. 2. Single question of law is proposed for our determination, which is, “Whether under the facts and circumstances of the case, the learned ITAT was justified to hold that the lease rental income was assessable u/s 12(19) of the repealed Income Tax Ordinance,1979 on actual receipt basis and not on the accrual basis, whereas, section 12(19) of the repealed Income Tax Ordinance,1979 clearly holds that lease rental income is assessable on received or receivable basis? 3. Briefly the facts leading to the lis at hand are that assessee, a public limited company is inter alia engaged in the business of leasing. Assessee company was duly approved by the CBR - now FBR - for the purposes of Third Schedule of erstwhile Income Tax Ordinance, 1979 (‘Repealed Ordinance’). Assessee filed return(s) of income for the assessment years under reference, which were subjected to examination under section 62 of the Repealed Ordinance, upon issuance of notice. In the…

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