| Citation(s) |
|---|
| 1982 SLG 695 1982 SLD 695 (1982) 46 TAX 133 |
Supreme Court of Pakistan
Civil Appeal No. 10 of 1972 and Civil petition No. 387 of 1969 decided on 26-1-1982. On appeal from the judgment and order dated 10-9-1969 of the former High Court of West Pakistan, passed in Civil Reference No. 5 of 1963
ASLAM RIAZ HUSSAIN, ACTING C.J., MUHAMMAD AFZAL ZULLAH, M.S.H. QURAISHI, JJ
Ali Bin Abdul Kadir, Advocate Supreme Court, instructed by Rao Muhammad Yousaf, Advocate-on-Record, for the Appellant. Muhammad Ilyas Khan, Advocate, Supreme Court, Instructed by Iftikhar-ud-Din, Advocate-on-Record, for the
Respondent.
Civil Appeal No. 10 of 1972 and Civil petition No. 387 of 1969 decided on 26-1-1982. On appeal from the judgment and order dated 10-9-1969 of the former High Court of West Pakistan, passed in Civil Reference No. 5 of 1963
ASLAM RIAZ HUSSAIN, ACTING C.J., MUHAMMAD AFZAL ZULLAH, M.S.H. QURAISHI, JJ
Ali Bin Abdul Kadir, Advocate Supreme Court, instructed by Rao Muhammad Yousaf, Advocate-on-Record, for the Appellant. Muhammad Ilyas Khan, Advocate, Supreme Court, Instructed by Iftikhar-ud-Din, Advocate-on-Record, for the
Respondent.
ROBERTS COTTON ASSOCIATION LTD
VS
COMMISSIONER OF INCOME TAX, NORTH ZONE, LAHORE
Law: Income Tax Act, 1922
Section: 66(1),10(2)(xi),10(2)(xv)
Income-tax Act, 1922 -- Section 10(1), 10(2)(xi), 10(2)(xvi) --Bad debt -- Trading loss -- Business expenditure -- 'A' and 'R' groups, two different legal entities shareholders of a Mill -- Agreement between 'A' and 'R' for the sale of shares of 'R' to A at 70% of the face value -- Agreement actuated by a desire on the part of 'R' to sever its connection with the Mill -- Mill not made a party to the agreement -- No evidence that Mill had refused or expressed its inability to pay the debt, although the said mill was running at a loss -- No material to show that mill had not discharged its liability in full to 'A' after the agreement -- Loss sustained by 'R' due to sale of shares at a discount of 30% -- Whether loss constituted bad debt and doubtful debt -- Held no -- Whether expenditure wholly and exclusively for the purposes of business -- Held no -- Whether constituted trading loss - Held no -- JUDGMENT The judgment of the Court was delivered by M.S.H. QURAISHI, J.---This is a certificated appeal from the judgment of the High Court dated 10-9-1969, whereby the question referred to it by the Income-tax Tribunal, Lahore, under Section 66(1) of the Income-tax Act, 1922, was answered against the appellant. Civil Petition No. 387 of 1969 earlier filed stands merged in this appeal and is disposed of as such. 2. The appellant, M/s. Roberts Cotton Association Ltd., is a private Limited Company consisting of the following seven shareholders:- (1) Sir William Roberts, (2) Mr. T.J. Roberts, (3) Lady Roberts, (4) Mrs. M.M. Lech, (5) Mr. M.E. Roberts, (6) Mrs. T.J. Roberts, and (7) Roberts Agricultural Research Trust. The appellant itself was a member of a group called the Roberts Group which comprised:-- (1) Sir William Roberts, (2) Mr. T.J. Roberts, (3) Lady Roberts, (4) Mrs. M.M. Lech, (5) Mr. M.E. Roberts, (6) Roberts Cotton Association Ltd, (appellant), (7) Sir William Roberts (M.A.) Ltd. (8) Mrs. T.J. Roberts. This Group and the Ali Group comprising Syed Maratab Ali and certain members of his family held the major and controlling shares in the Abbasi Textile Mills Ltd. 3. The appellant used to supply cotton to M/s. Abbasi Textile Mills under a running account which…
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