Law: Income Tax Ordinance, 1979

Section: 23(1)(x)

INCOME TAX ORDINANCE, 1979 (XXXI OF 1979)----Section: 23(1)(x) - Deductions - Allowing the provisions of bad debts in contravention to the provision of Section 23(1)(x) by the Appellate Tribunal - Holding that interest credited to Suspense account is not liable  to tax which included the interest charged on mercantile basis on the loans which included recoverable and/or secured by tangible securities and deviating from s in PICIC’s case at Sindh High Court and Supreme Court of Pakistan level and to disapprove allocation of expenses to capital gain - Grievance of the petitioners - Reference to High Court - FACTS The following two questions of law arise out of the order of the Income Tax Appellate Tribunal: i. Whether under the facts and in the circumstances of the case the learned ITAT was justified to allow the provision of bad debts in contravention to the provision of section 23(1)(x) of the Income Tax Ordinance, 1979 assuming that creation of provision for bad debts are synonymous with written off bad debts and failing to appreciate that even in case of written off bad debts, the condition of irrecoverability of the same as determined by the assessing officer is a pre requisite for any allowance u/s 23(1)(x) of the Income Tax Ordinance, 1979. ii. Whether on the facts and circumstances of the case the learned ITAT was justified, to hold that interest credited to suspense account is not liable to tax which included the interest charged on mercantile basis on the loans which included recoverable and/or secured by tangible securities, and deviating from in PICIC’s case at Sindh High Court and Supreme Court of Pakistan level. iii. Whether on the facts and circumstances of the case the learned ITAT was justified to disapprove allocation of expenses to capital gain? DECISION (A.) The first issue of law relates to provision for bad debts which have been decided by the Lahore High Court Lahore in PTR No. 184 of 2002 - The first issue of law relates to provision for bad debts which have been decided by us in PTR No.184 of 2002 [(2022) 126 TAX 575 (H.C. Lah.)] that a debt becomes irrecoverable when it is written off and so the entitlement regarding deduction for…

Deprecated: trim(): Passing null to parameter #1 ($string) of type string is deprecated in /home/digixyei/sldsystempk.com/view/master-layout/view_case.php on line 492