Law: Income Tax Ordinance, 2001

Section: 15,15A,16,30,67,113,113(3),113(3)(a),120 ,122(5A),127

Law: Income Tax Rules, 1922

Section: 13

(a) Income Tax Ordinance (XLIX of 2001)---Ss.113, 120 & 122(5A)---Turnover---Sale of assets and scrap---Scope---Company deriving income from telecom and broadband services---Minimum tax, charging of---Scope---Officer Inland Revenue charged the taxpayer/company minimum tax on sale of assets and scrap which charge was deleted by the Commissioner---Department assailed later order before the Appellate Tribunal Inland Revenue ('Tribunal')---Stance of the OIR was that the sale of any item with view to earn profit qualified for inclusion of the same in the turnover and sale of fixed assets was also part and parcel of taxpayer's business activity---Validity---Scrap was generated, which was sold, only to reduce the cost of material consumed in the manufacturing process; further, scrap churned out in the process of the assesse's manufacturing activities did not form part of the trading goods or stock-in-trade of the assesse; hence, the scrap sales could not be taken as part of turnover of the business carried out by the assesse---Assesse/company was not engaged in the business of sale of scrap---Turnover meant the value of goods purchased/ sold in the course of carrying of business---Thus, scrap by the assesse/company did not have element of turnover in the present case---Tribunal viewed that the scrap sales could not be taken as a part of turnover for the purpose of deduction---Commissioner (Appeals) had rightly deleted the charge of minimum tax on sale of scrap---Appeal filed by the Department was dismissed, in circumstances. 2009 PTD 1187 ref. (b) Income Tax Ordinance ( XLIX of 2001)----Ss.113(3)(a), 120 & 122(5A)---Turnover---Sale of assets and scrap---Scope---Company deriving income from telecom and broadband services---Minimum tax, charging of---Officer Inland Revenue charged the taxpayer/ company minimum tax on sale of assets and scrap holding that the assesse was in receipt of fixed assets which was included in total turnover as according to the OIR tax was to be computed on ' turnover from all sources'---Said charge was deleted by the Commissioner, and Department assailed later order before the Appellate Tribunal Inland Revenue…

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