Law: Income Tax Ordinance, 1979

Section: 17

INCOME TAX ORDINANCE, 1979 (XXXI OF 1979)----Section: 17 - Interest on Securities - Holding by Appellate Tribunal that interest on securities is recoverable on accrual basis and that renovation of leasehold premises is only entitled for depreciation and is not allowable as reverse expenditure - Justification - Challenge to - FACTS The following questions of law arise out of the order of the Income Tax Appellate Tribunal: i. Whether on the facts and in the circumstances of the case the honourable Tribunal was justified in confirming the action of the respondents in respect of taxation of interest on securities on accrual basis? ii. Whether the Tribunal, in the presence of explicit expression “receivable” used by the legislature in section 17 of the repealed Income Tax Ordinance, 1979 and enunciated by the courts as “received” was correct in law to hold that interest on securities is taxable on accrual basis? iii. Whether on the facts and in the circumstances of the case, the Tribunal was justified to hold that renovation of leasehold premises is only entitled for depreciation and is not allowable as revenue expenditure? DECISION (A.) Question No. (i), (ii) have been answered by the Division Bench of Appellate Tribunal based upon the of Supreme Court - So far as question Nos. i and ii are concerned, these have been answered by a Division Bench of this Court in PTR No.74 of 2000 based upon the of the Supreme Court of Pakistan reported as Commissioner of Income Tax v. Habib Bank Ltd. (2014 SCMR 1557). Since the questions raised above have already been set at rest by the Supreme Court of Pakistan, this reference application is also decided accordingly and the questions of law at ‘i and ii’ are decided in favour of the applicant. (B.) Question No. iii does not arise from the impugned order of the Tribunal, therefore, reference application is dismissed - As regards question No. iii, we do not feel inclined to answer the question as it does not arise from the impugned order of the Tribunal. To the extent of question of law at ‘iii’, the reference application is dismissed. Case Referred…

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