Law: Income Tax Act, 1922

Section: 10,12

Income Tax Act (XI of 1922)-----Ss. 10 & 12---Wealth tax liability, Held, was an allowable expense under S. 10 or 12 of the Income Tax Act, 1922. Commissioner of Income-tax v. Zakia Siddiqui 1989 P T D 135 fol. JUDGMENT NASIR ASLAM ZAHID, J: -- This judgment will dispose of Income Tax References Nos.118, 119 and 120 of 1984 as common questions are involved in these three references. Parties are also same, namely, the applicant is the Commissioner of Income Tax, Central Zone 'C', Karachi and the respondent is Messrs M. Hussain Ahmed. The only difference is that I.T.R.118 of 1984 relates to assessment year 1974-75, I.T.R. No.119 of 1984 relates to assessment year 1975-76 and I.T.R. No.120 of 1984 to assessment year 1977-78. In all these three reference applications filed by the Commissioner of Income tax under section 136(2) of the Income Tax Ordinance, 1979, the following two questions have been raised:-- (i) Whether, on the facts and the circumstances of the case, the Tribunal was justified in holding the application (under section 136(1) of the Income Tax Ordinance, 1979) of the applicant as barred by time? (ii) Whether, on the facts and circumstances of the case, the wealth tax liability is an allowable expense under section 10 or section 12 of the Income Tax Act, 1922? 2. During the relevant years, the respondent had claimed deductions from their income for amounts representing wealth tax liabilities. The Income Tax Officer disallowed the claims of the respondent. Respondent's appeals were allowed by the Appellate Assistant Commissioner. The Department took the matter to the Income Tax Appellate Tribunal who maintained the decision of the Appellate Assistant Commissioner. The…

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