Law: Income Tax Ordinance, 1979

Section: 24,24(2)

Law: Workers Welfare Fund Ordinance, 1971

Section: 4

Income tax Ordinance (XXXI of 1979)---S. 24 (2) Workers Welfare Fund Ordinance (XXXVI of 1971), S. 4 Levy of amount payable to Workers Welfare Funds to be made with reference to total assessable income Where assessee sustaining loss or profits or gains in any year and loss cannot be wholly set of, so much of loss as is not so set off or whole of where assessee had no income under any other bead, held, was to be carried of loss to following year Assessee after adjustment of loss brought forward under S. 24 (2), Income tax Ordinance, 1979 having forward no assessable income left and on the contrary there was huge loss to be carried forward. Held further, there could be no levy of surcharge in circumstances. ORDER This departmental appeal is directed against the order of the learned Appellate Assistant Commissioner has disputed the deletion of an addition of Rs, 34,572 made to the trading account. Deletions of partial add backs made out of some expenses claimed in the Profit and Loss account are also agitated. The last grievance relates to the cancellaticn of workers welfars fund. 2. The respondent is a public limited Company deriving, income from manufacture and sale of cotton and man made yarn. The Income tax Officer noted that the respondent had claimed a combined wastage of 17'34 %. He considered this wastage to be excessive when compared to the normal admissible wastage of 15% in cotton yarn. He, therefore, did not accept the wastage as declared mainly because the respondent did not maintain stagewise production record. Keeping in view the Awan Committee Formula, be restricted the allowance of wastage to 15 Y. and made an addition of Rs. 34,572 representing the value of excessive unexplained wastage of 25,962 pounds. In the appeal brought before the learned Appellate Assistant Commissioner, this addition was deleted mainly relying upon the certificate of test conducted by Pakistan Institute of Cotton Research and Technology to the effect that the wastage claimed by the respondent was reasonable. The department's grievance is that the learned Appellate Assistant Commissioner was not justified n deleting the addition because tile wastage claimed was on the high…

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