Law: Income Tax Ordinance, 1979

Section: 23,23(1)(xv),23(l)(xviii),24

(a) Income Tax Ordinance (XXXI of 1979)--- ----Ss. 23(1)(xv) & 23(l)(xviii)---Admissible deductions---Distinction between Ss.23(1) (xv) & 23(1)(xviii) of the Income Tax Ordinance, 1979. There is distinction contained in sub-clauses (xv) and (xviii) of section 23 which provides for admissible deductions while computing income under the head "income from business or profession". Sub-clause (xv) says, "any expenditure laid out or expended on the training of any person, being a citizen of Pakistan, in connection with a scheme approved by the C.B.R., for the purposes of this clause". Sub-clause (viii) is of residuary nature and provides that "any expenditure (not being 0 nature of capital expenditure or personal expense of the assessee) laid out of expended wholly or exclusively for the purpose of such business or profession". (b) Income Tax Ordinance (XXXI of 1979)---S.23(1)(xvii)---Admissible deductions-- -Expenses on employee going for training abroad to the principals under a scheme duly approved by the Government---Expenses so incurred, held, were covered by cl. (xviii) of S.23(l) of the Income Tax Ordinance, 1979 and were allowable in toto. CIT, East Pakistan v. Messrs Engineers Limited, Dacca PLD 1967 SC 524 fol. 1991 PTD (Trib.) 531; 1986 SCMR 968; Packages Limited v. CIT 1993 PTD 753; Industrial Engineer Agencies v. CIT 1992 PTD 954 = PLD 1992 SC 562 and PTD 1991 (Trib.) 351 ref. (c) Income Tax Ordinance (XXXI of 1979)--- ----S.24---Inadmissible deduction---Payment of royalty to the principals--­Disallowance---Neither a notice in that behalf was served on assessee before the intended action nor the reason made for the disallowance was otherwise convincing---Amount of advance tax having been deducted from the amount earmarked for payment as royalty on the very day of the payment thereof, disallowance could not be sustained, as sufficient compliance of law had been made. (d) Income Tax Ordinance (XXXI of 1979)--- ----S.23 (1) Expln. (b)---Word 'paid' as used in S.23(1), Income Tax Ordinance, 1979, includes the payments "incurred according to method of accounting upon the basis of which the income is computed". (e) Income Tax Ordinance (XXXI of…

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