Law: Income Tax Act, 1922

Section: 2,2(5A),2(9),4(3)

[Income Tax Act, 1922 (XI of 1922)].........Sections 2(5A), 2(9), 4(3) Company-Person-Taxable entity-Assessee-Company incorporated as Private Limited Company under the Companies Act, 1913-Whether a taxable entity Held yes-In terms of Memorandum of Association assessee-company to carry on primarily the jobs of consultants, advisors, structural engineers, architects, etc.-Can undertake any other civil, engineering and architectural works of any kind anywhere in the world-Whether main object of the assessee was to earn profits-Held yes-Whether a "commercial organisation"-Held yes-Assessee-company having its independent Board of Management although nominees are mostly from Government because the entire funds were invested by Government-Patronage and financial support of the Government whether can render the assessee-company a department or a limb of the Government or a representative of the Government-Held no--Whether assessee company entitled to exemption from tax-Held no. Cases referred to: (1968) 18 Taxation 65 (Trib); West Pakistan Road Transport Board Lahore v. Commissioner of Income Tax, Lahore (1974) 29 Taxation 53 and Sind Industrial Trading Estate Ltd. v. Commissioner of Income Tax Karachi (1975) 31 Taxation 174. JUDGMENT [The order was passed- by M.T. SIDDIQUI, President].--This appeal by a company comes up before us in the following circumstances. 2. The appellant had claimed before the Income Tax Officer that it was a company which was 100% owned by the Government of Pakistan and therefore, it was not liable to tax. The Income Tax Officer, however refused to accept this position and, after rejecting the accounts, determined the income by applying a provisional rate of 10% on the mm receipts of Rs. 54,60,920 in respect of the G. Project. He then mad certain disallowances out of the expenses claimed in the profit and loss account. 3. When the matter went to the learned AAC he confirmed the tax ability of the appellant as also the method of computation adopted by the Income Tax Officer. 4. Before us the appellant, in the first instance, contests the very Taxability again, on the same plea, that the company is 100% owned by the Government of Pakistan and,…

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