Law: Income Tax Ordinance, 1979

Section: FirstSched.,PartII,para.A(2)(a)

(a) Income-tax---Addition---Interest income---Public sector Corporation deriving income from managing agencies, interest, office allowance, commission on guarantees and dividends---Assessee Corporation showed in its accounts certain amount receivable from another public sector Corporation---Assessing Officer treated said amount as income of the assessee and made addition--¬Validity---Income Tax Appellate Tribunal deleted the additions as being not justified in circumstances. (b) Income Tax Ordinance (XXXI of 1979)-----First Sched., Part II, para. A(2)(a)---Super-tax---Dividend income--¬Assessee, a public sector Corporation deriving income from managing agencies, interest, office allowance, commission on guarantees and dividends ---Assessee calculated tax payable on declared income @ 5 % on the plea that the entire income declared was from income from dividends--¬Direction of Commissioner of Income-tax that concessional rate of super-tax be applied to the case of assessee, held, was justified. ORDER By this consolidated order we proceed to decide eight cross-appeals in the case of a Public Sector Corporation managing various units/companies. The cross-appeals for the Assessment year 1985-86 arise out of an order, dated 11-6-1988 recorded by the learned CIT (Appeals) Zone-2, Lahore whereas the other six cross-appeals arise out of an order, dated 25-11-1989 recorded by the learned CIT (Appeals), Zone-I, Lahore. The common ground taken by the assessee in, all the years under consideration is the assessment to tax of interest in respect of another Public Sector Corporation PIDC, whereas in the Assessment years 1986-8'7 to 1988-89, the assessee has also agitated the assessment of dividend income under the head income from business or profession. The Department on the other hand has taken a common ground in all the years under consideration to agitate the direction of the first Appellate Authority to tax the divided income at the rate of 5 % 2. The relevant facts in brief are that the assessee is a Public Sector Corporation and derived income from Managing Agencies, interest, office allowance, commission on guarantees and dividends. The bulk of the income is said be…

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