Law: Income Tax Act, 1922

Section: 10,10(2),(iv),(v),(xvi)

Law: Constitution of Pakistan, 1973

Section: 185(3)

Income-tax Act (XI of 1922)---S. 10(2), (iv), (v), (xvi) read with Constitution of Pakistan (1973), Art. 185(3)---Question whether cases can be decided relying exclusively on English foreign case-law-Whether provisions of income-tax Act, 1922 in pari materia with provisions of Foreign Income tax Act-Leave to appeal granted to examine questions. Allahabad Glass Works v. Commissioner of Income-tax (1962) P T D 327 ref. ORDER DORAD PATEL, J.--The petitioner is a, registered firm which carries on construction business. In the events that happened, it had submitted its income returns for the assessment year 1969-70 in which it had dis­closed a gross profit of nearly 151 on its gross earnings. However, after preparing its accounts, it discovered that it had not claimed depre­ciation in the manner prescribed in section 10 of the Income-tax Act, 1922 (hereinafter called the said Act) on its machinery and equipment. Therefore, it claimed a sum of Rs. 1,29,806 for the same and trans­ferred this amount from its trading account into its profit and loss account. It would appear that the petitioner's assessment for returns of income thus submitted by it was made with the return submitted by it for the assessment year 1970-71. Nothing turns-on the details of the returns submitted in this order except that as in the previous year the peti­tioner claimed Rs. 97,683 as depreciation of its machinery equipment etc. The Income-tax Officer rejected the petitioner's returns and assessed its profits at more than 16 % of its gross receipts for the two assessment years. Further, after thus raising the assessed profits the Income-tax Officer also rejected the amounts of Rs. 1,29,806 and Rs. 97,683 claimed by the petitioner for depreciation for the assessment years 1969, 1970, 1971 respectively. Therefore, the petitioner challenged these orders in appeals before the Income-tax Appellate Tribunal, but as these appeals were dismissed, it filed references in the Lahore High Court under sec­tion 66(i) of the said Act. Both the references were heard together, because they arose out of similar facts and raised the…

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