Law: Income Tax Act, 1922

Section: 2,10,10(2)(xvi),10(3),10(4)(a),10(4)(bb) ,18(3)(b),4(1)(c),42

Income-tax Act, 1922 -- Section 4(1) Explanation Sections 2, 10, 10(2)(xvi), 10(3), 10(4)(a), 10(4)(bb), 18(3)(b) -- Income -- Place of accrual -- Business expenditure -- Non-resident company -- Head office outside Pakistan -- Doing work as sub-contractor in Pakistan -- Salary and wages of employees rendering services in Pakistan -- Whether deemed to accrue or arise in Pakistan -- Held yes -- Failure of non-resident company to deduct tax from salary and wages under Sec. 18 -- Expenditure incurred towards salary and wages -- Whether admissible expenditure in the hands of the company -- Held no -- Commission -- Non-resident -- Business connection -- Non-resident company securing contract work for assessee non-resident company in Pakistan -- Non-resident company entitled to commission neither rendering any service in Pakistan nor in any way connected with assessee's operation or enterprise in Pakistan -- Commission not dependent upon profits of assessee-company in Pakistan -- Commission payable outside Pakistan -- Whether commission arose from business connection in Pakistan -- Held no -- Whether accrued or arose or deemed to accrue or arise in Pakistan -- Held no -- Whether deduction of tax from commission or its disallowance permissible under Sec. 10(4)(bb) -- Held no -- Commission -- Business expenditure -- Deduction of tax at source Commission paid to Chamber of Commerce for foreign trade -- Admissibility to business expenditure -- Whether to be decided under Sec. 10(2)(xvi) independently of Sec. 18(3)(b) -- Held yes Interest -- Interest paid to banks and other lending institutions abroad on capital borrowed and brought into Pakistan -- Interest whether deemed to accrue or arise in Pakistan -- Held yes -- Interest paid without deduction of tax at source -- Whether admissible expenditure under Sec. 10(3) -- Held no -- Business expenditure -- Head office expenses -- Non-resident company doing contract work in Pakistan -- Head office expenses -- Whether admissible expenditure -- Held yes -- Business expenditure -- Subscription to clubs and cost of dinner parties, etc. -- Expenses not in the interest of business -- Whether admissible as business expenditure --…

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