Law: Income Tax Act, 1922

Section: 48(a),(1)(b),24(2)

Income tax Act (XI of 1922)----Ss. 48(a), (1)(b) & 24(2) Set off loss Bank's status determined as ordinary resident for. year 1955 56 and non resident for years 1956 57 and 1957 58 Foreign losses in 1955 56 ignored from consideration against income for year 1956 57 Such foreign losses again ignored fur assessment Year 1957 58 and not allowed to be set off against income accruing in Pakistan Held, on change of status from resident and ordinary resident (in 1955 56) to non resident (in 1956 57 and 1957 58), provisions of S. 24(1) did not apply to income falling outside purview of S. 4(1)(a) and 4(1)(b) and benefit of losses left to be carried forward under S. 24(2) also not permissible. Malwa United Mills v. C. I. T. 45 I T R 210 ; 1972 P T D (Trib.) 42 ; I. T. A. No. 241 of 1961 62 ; I. T. A. No. 7456 of 1970 71 and Indore Malwa United Mills Limited v. Commissioner of Income tax (1959) 35 I T R 271 ref. JUDGMENT K. A. GHANI, J. This is an application made under section 66 (1) of the Income tax Act (hereinafter referred as the said Act) moved by the applicant company registered outside Pakistan, but has its offices in Karachi. 2. Following questions have been raised as questions of law arising out of the orders of the Tribunal passed on 5 1 1973 in I. T. R. No. 157 of 1973 : "(1) Whether in the facts and circumstances of the case the Tribunal is right in holding that the applicants' losses determined for assessment year 1955 56 in the status of "Resident & Ordinary Resident" cannot be set off under section 24 (2) of the Income tax Act against profits determined for Assessment year 1956 57 and later years only because the applicant's residential status in assessment year 1956 57 and later years was determined as "Non Resident "? (2) Whether the Tribunal is right in interpreting its order dated 19th June, 1962 in I. T. A. No. 241 of 1961 62 to the effect that "losses, if any, to be carried forward should be duly set off against income or profit computed" as meaning that what was legally permissible should be done ? 3. The statement of facts of the above case giving rise to this application and the questions raised is reproduced hereinbelow : "(1) The…

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