Law: Income Tax Act, 1922

Section: 66,66(1),10(7),FirstSched.,rr.3,6

Law: Constitution of Pakistan, 1973

Section: 185(3)

(a) Constitution of Pakistan (1973)-- Art. 185(3)-Income-tax Act (XI of 1922), Ss. 66(1) & 10(7) Leave to appeal granted to examine question whether High Court had on a reference under S. 66(1), Income-tax Act, 1922 correctly interpreted provisions of S. 10(7) of Act, 1922 read with ff. 3 & 6 of Rules set out in First Schedule of Act, 1922. (b) Income-tax Act (XI of 1922) S. 10(7), First Sched., rr. 3 & 6 - "Insurance business""Ordinary trader (individual or company"-Distinction-Substance of thing and not manner in which account was stated had to be looked at in revenue cases-Insurance company doing no other business except that of insurance-Assets, incomes, gains of such company were all relatable to business of Insurance and consequently on strength of S. 10(7), computation of tax had to take place in accordance with First Sched.-[Words and phrases]. British Tax Encyclopaedia at p. 1244 ; Liverpool and London And Globe Insurance Company v. Banett (Suveyor of taxes) 1913 A C 610 ref. (C) Income-tax ACT (XI of 1922)- Ss. 10(7), 11, 15 & 22, First Sched. rr. 3 & 6-Insurance company doing only insurance business-Completeness and importance of accounts prescribed under Insurance Act for a company carrying on business of insurance for purposes of income-tax stated with reference to statutory provisions-Such statement of account serves as basis for Income-tax Officer-Not within competence of Income-tax Officer to exclude disputed amount from such accounts, or to ignore them as a component of business of insurance. JUDGMENT SHAFIUR RAHMAN, J.-The assessee Habib Insurance Company Limited was granted leave to appeal to examine whether the High Court of Sind had on a reference made to it under section 66(1) of the Income-tax Act correctly interpreted the provisions of section 10(7) of the Income-taxi Act read with rules 3 and 6 of the Rules set out in the first schedule of the Income-tax Act. The appellant had also applied under section 66-A(2) of the Income-tax Act, 1.922 and had been granted by the Sind High Court a certificate of fitness for appeal to this Court. It is dated 22nd of May, 1970. The appellant a public limited company was…

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