Law: Income Tax Ordinance, 1979

Section: 12,12(7)

(a) Income-tax Ordinance (XXXI of 1979)---S. 12(7)--S.R.O. No. 960(1)/79, dated 29-9-1976 [as amended by S. R.O. 260(1)-77, dated 28-3-1977]--Charge of interest--Loan--Unpaid--Unpaid sale price of Capital goods--Whether loan--Unpaid sale price of capital goods reflected in Balance-Sheet of an assessee, held, would not fall within miss chiefs of S.12(7) of Income-tax Ordinance, 1979--Word 'advance' or 'loan' as used in subsection (7) of S.12 of Ordinance means and implies a loan or advance made in terms of money for specific purposes, namely, for investment, securities, stock or shares etc.--It would, held, not include within its fold unpaid sale price of capital goods. Bombay Steamshipping Company v. Commissioner of Income-tax 1965 56 I T R 521 S C and Ramsden v. Commissioner of Inland Revenue 37 T -C 619 rel. (b) Income-tax Ordinance (XXXI of 1979)-- ---S. 12(7)--S.R.O. 750(1)/79, dated 23-8-1979 [as amended by S.R.O. 197(1)/81, dated 7-3-1981 and S.R.O. 830(1)/83, dated 16-3-1983]-­Interpretation of fiscal statutes--Meaning ascribed by Central Board of Revenue to fiscal statutes if not otherwise in conflict with principles of interpretation of Statutes can easily be taken by Courts as a basis for interpreting a particular word used in a particular fiscal statutes--No one, held, could better appreciate connotation of a word used in fiscal laws than Central Board of Revenue. ORDER FARHAT ALI KHAN (MEMBER).--This appeal is directed against the order of learned Commissioner of Income-tax (Appeals) recorded by him, on 18-9-1982 in so far it confirms the charge of interest under section 12(7) of the Income-tax Ordinance, 1979, hereinafter referred to as the Ordinance, on outstanding balance of Rs.47,717: The brief facts giving rise to this appeal are that the appellant, a private limited company filed its return for 1979-80 declaring a loss of Rs.24,732. During the course of assessment the Income-tax Officer discovered that inter alia a sum of Rs.46,224 was due from Messrs S.W.L. Since he was of the view that aforesaid amount fell within the mischief of section 12(7) of the Ordinance he, therefore, levied interest at the rate of 2% above bank rate and added it to…

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