Law: Income-tax Act (XI of 1922)

Section: 18-A (4)

Law: Constitution of Pakistan, 1962

Section: 98

Law: Income Tax Act, 1922

Section: 18-A(l)

(a) Income-tax Act (XI of 1922) S. 18-A (4)-Contention that advance tax on commission paid within 15 days of date of receipt and as such no default committed and word "received" meant actual receipt and not "accrued" even though peti tioner maintaining mercantile system of accounting-Contention, held, correct-Though actual receipt of income is .not material in mercantile system of accounting but subsection (4) deals with a different subject, i.e. date for making deferred payment of advance tax. (b) Income-tax Act (XI of 1922) S. 18-A (4)-Words and phrases-"Adjust"-Meaning. The word adjust" ordinarily means "to settle and ascertain the amount due" after balancing debits and credits. `Adjustment' is a word in common use. It is commonly applied to the settlement among various parties of their several shares in respect of claims, liabilities, or payments relating to a General Average claim. That is not its only application; it is a word which is applied to other matters in the same manner in which it is commonly applied in marine insurance. When there are matters which require re-arranging, regulating, or equalising so as to restore the true balance the process of so re-arranging, setting right, regulating, or equalising may he described as adjusting'." (c) Income-tax Act (XI of 1922) S. 18-A (4)-Adjustment-Fact that some time is taken to finalise accounts after close of accounting year not denied-Accounts of managed Company for the year ending not issued to shareholders until some six months later and not adopted until annual general meeting- Evidence that account, of commission mutually settled and adjusted between parties on end of year not existing-Mere crediting of commission amount of petitioner in balance-sheet, held, cannot be said amounts to adjustment, in circumstances of case--Imposition of penal interest set aside. Date of hearing: 9th April 1979.                                                                        …