Law: Income Tax Act, 1922

Section: 3,4,10

Income Tax Act, 1922 (XI of 1922)-Sections 3, 4, 10---Income----Time of accrual of income-Mercantile system- of accounting Service Airlines receipts from sale of tickets whether trading receipts at the point and at the time of sale of tickets irrespective of the practice followed by the assessee and notwithstanding superimposed contract of sale of tickets that price would be refundable in full or in part U the tickets remain unutilised--Held yes--Assessee following mercantile system of accounting-Amount representing unclaimed balance consisting of the value of unutilised tickets whether trading receipts of the year in which these were transferred to the Profit and Loss Appropriation account---Held yes. Cases referred to; Punjab Steel Scrap Merchants Association Ltd. v. Commissioner of Income-tax, Punjab (1961) 43 I.T.R. 164 ; Lakshmanier & Sons v. Commissioner of Income-tax (1953) 23 I.T.R. 202 (S C.) ; Punjab Distilling Industries Ltd. v. Commissioner of Income-tax (1959) 35 I.T.R. 519(S.C,) ; Ratanchand Lallumal, In re. (1936) 4 ITR 189; Commissioner of Income tax v. Maharaja Dhiraja Kameshwar Singh of Darbhanga (1933) 1 I.T.R.94; MorIey v. Tattershal (22 Tax Cases 51); Hotel Metropole Ltd. Karachi v. Commissioner of Income-tax, Central, Karachi (1973) 28 Taxation 96 and Commissioner of Income tax v. E.V. Miller and others (P L D 1959 S C 219; (1959) 1 Taxation I (S.C.). JUDGMENT (The judgment of the Court was delivered by I. MAHMUD J.-The following question of law (along with another question which has not been pressed) has been referred to this Court by the Income Tax Appellate Tribunal, Karachi Bench, Karachi, by its order in the R.A. 334/66-67 dated 30-10-1968 at the instance of the assessee, Pakistan International Airlines Corporation, the applicant herein, under section 66 (1) of the Income Tax Act, 1922; (hereinafter referred to as the Act):- "Whether in the facts and circumstances of the case, the Tribunal was right in holding that the sum of Rs. 6,95,171/-representing unclaimed balances consisting of the value of unutilised tickets was taxable income of the applicant?" 2. The applicant, Pakistan International Airlines Corporation, is a statutory…

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