Law: Income Tax Act, 1922

Section: Second ScheduleClause83

Income Tax Ordinance, 1979 (XXXI of 1979)-Second Schedule-Clause 83-Deduction-Wealth-tax liability-Assessee claimed deduction of wealth-tax payable as an admissible expenditure-Income Tax Officer disallowed the same-C.I.T. (A) took the view that wealth-tax was an admissible expenditure irrespective of the fact whether the payment had actually been made or not-Tribunal rejected the departmental appeal-Whether justified-Held yes-Words, "payable" and "paid", meaning of. Having heard the learned counsel for the parties and considered their respective contentions, we are inclined to agree with the learned Income Tax Appellate Tribunal and do not feel persuaded to hold that it is only when the wealth-tax had actually been paid that it can be claimed as expenditure. Such an interpretation, in our view, would amount to reading the word 'paid' appearing in clause 83 as 'payable' for which there appears to be no warrant or justification. It is well settled and needs no authority that the words used in a statutory instrument are to be construed in their ordinary and natural sense and if different words are used by the legislature, the object is to convey different meaning, unless the context otherwise requires. In the present case, there is no compulsion to construe 'payable' as 'paid;'. The expression 'paid' and 'payable' have different connotations. While 'payable' has reference to liability which has accrued the expression 'paid' necessarily imports the idea of actual payment. A reference to the legislative history would also support this interpretation. Though in the original clause 83 word 'payable' was used but by Finance Ordinance, 1980 this word was substituted by 'paid'. The same position obtains as regard the amendment brought about by Finance Ordinance, 1981. It is trite law that when legislature brings about an amendment the intention generally is to bring about a change. In this view of the matter, the learned Income Tax Appellate Tribunal was correct in holding that under the original clause 83, wealth tax could be claimed as an expenditure if the liability has arisen even though no actual payment had yet been made in the charge year. THIS JUDGMENT DELIVERED…

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