Law: Income Tax Ordinance, 1979

Section: 2,2(24),2(24)(b),2(44),11,11(1),14,14(1) ,30,34,SecondSched.,Cl.118D,Cl.99

(a) Income Tax Ordinance (XXXI of 1979)--Ss. 34, 30, Second Sched., cls. (118D) & (99)---Set off of losses---Income from other sources---Exemption---Assessee was enjoying exemption under cl. 118-D of the Second Schedule of the Income Tax Ordinance, 1979---Nil income was assessed but Assessing Officer treated the other income as taxable under S.30 of the Income Tax Ordinance, 1979 and assessed accordingly and did not set off against exempt income---Validity---Total income was to be computed which may include exempt income---If exempt income was positive or negative the same was to be computed---While computing the exempt income/loss the Assessing Officer could not probe the trading result and if he was satisfied that the exempt income or loss declared was from the exempt source then he had to accept the declared version of exempt income/loss subject to statutory additions including that of tax depreciation---If there was no other .income then the declared exempt income/loss would be computed as total income---In case there was other income which was taxable then the same was to be included in the positive exempt income and total income from exempt and non-exempt sources was to be computed, however, tax was to be charged on taxable income only---In case there was taxable income from other sources and there was business loss of exempt income then as per provisions of 34 of the Income Tax Ordinance, 1979 taxable income was to be set off against exempt (loss) separately from the taxable income from other sources---First Appellate Authority was not justified to remand the case to the Assessing Officer---Appeals were accepted and orders of the authorities below were vacated---Assessing Officer was directed to accept the declared exempt income/loss and to set off the taxable income from other sources against loss of exempt income as had been envisaged under S.34 of the Income Tax Ordinance, 1979. 2000 PTD 359 and 1999 PTD (Trib.) 1528 rel. (b) Income Tax Ordinance (XXXI of 1979)--- ----Ss. 2(24)(44), 11(1) & 14(1), proviso---Income---Income includes loss of income profits or gains and "total income" means total amount of income from all the sources---Total…

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