Law: Income Tax Ordinance, 1979

Section: 22,30,31(1)(b),34,66A,136

Income Tax Ordinance (XXXI of 1979)----Ss. 22, 30, 31(1)(b), 34, 66-A & 136---Expenditure against interest income---Reference to High Court---Assessing Officer, took interest income of assessee under S.22 of Income Tax Ordinance, 1979 and allowed preliminary expenditure against ; interest income---Inspecting Additional Commissioner, however, found the order of Assessing Officer as erroneous and prejudicial to the interest of Revenue and initiated proceedings under S.66-A of Income Tax Ordinance, 1979 and denied expenditure against interest income under S. 31(1)(b) of Income Tax Ordinance, 1979---Income Tax Appellate Tribunal accepting appeal against order of Inspecting Additional Commissioner, set aside the same---Validity---Provisions of S.66-A of Income Tax Ordinance, 1979 could only be attracted when decision of Assessing Officer was prejudicial to the interest of Revenue---Provisions of S.34 of Income Tax Ordinance, 1979 had clearly shown that loss in one year could be claimed as set off against the profit in the next year --Assessee, if had shown loss and proved that he had suffered losses, the income computed though could not be prejudicial to the interest of Revenue in that year, but it would lie for set off against the next year and those losses shown would entitle assessee to adjustment which could cause prejudice to the interest of Revenue---Income Tax Commissioner, in circumstance was right in invoking provisions of S.66-A of Income Tax Ordinance, 1979---Impugned order of Income' Tax Appellate Tribunal, was not well -founded---Interest income shown by assessee could not be 'qualified to be business income---Questions raised from the of Income Tax Appellate Tribunal, were answered in negative and accepting appeal, order passed by Appellate Tribunal was set aside and order of Inspecting Additional Commissioner, was upheld. Commissioner of Income Tax v. Khulna Railway Company PLD 1962 SC 128 and Genertech Pakistan Ltd. v. Income Tax Appellate Tribunal of Pakistan 2004 SCMR 1319 ref. ORDER The respondent was incorporated on 31-8-1995 as public company with primary object to undertake leasing business. No leasing business was done during the year…

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