Law: Income Tax Act, 1922

Section: 10(4)(c),10(2A),10(2)

Income-tax Act, 1922 --Sections 10(2)(xvi), 10(2A), 10(4)(c) -- Business -- Trading liability -- Liability debited in the books of account -- No disbursement made for over three years -- Liability not legally enforceable by creditors being barred by time -- Liability of assessee, whether ceased -- Held no -- Provident Fund -- Fund maintained by employer outside Pakistan -- Contributions to fund made by employees out of additional salary paid by employer for the purpose -- Provision of sub-section (4)(c), whether can be invoked -- Held no -- Business expenditure -- Travelling expenses -- Company -- Plying cargo ships between East and West Pakistan -- One of the ships going out of commission and replaced by purchase of a new ship in United Kingdom -- Ship purchased in fit condition and ready to sail -- Crew in employment of company in Pakistan flown to United Kingdom for plying the ship on its first voyage -- Travelling expenses, whether revenue expenditure -- Held yes -- Income-tax -- Assessment -- Add back -- Provident fund, maintained by assessee for benefit of employees, recognised -- Contribution towards such Fund -- Deductable expenditure -- Add back not sustainable -- Income-tax Act (XI of 1922), section 10(4)(c) -- Contribution to "Merchant Navy Officer Provident Fund" -- Payment representing "additional salaries to European staff" -- Allowable deduction -- Provision of section 10(4)(c) not invokable in circumstances of case -- Corresponding Sections: Income-tax Ordinance, 1979 -- Sections 23(1)(xvii), 24(h), 25 - ORDER The order was passed by K. SALAHUDDIN, Accountant Member. ---This is a direct appeal from the order of the Income-tax Officer and pertains to the assessment made on the appellant for the charge year 1959-60. 2. The appellant, a private limited company, plies cargo ships, mostly between East and West Pakistan, and for the year under consideration filed a return showing the total income at Rs. 17,83,305. The Income-tax Officer disallowed certain expenses claimed by the appellant and computed the assesseed income at Rs. 19,03,922. In this appeal the objections raised in the grounds of appeal and pressed before us relates to some of those…

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