Law: Income Tax Ordinance, 1979

Section: 156,24(c)

(a) Income Tax Ordinance (XXXI of 1979)---Ss. 24(c) & 156---Inadmissible deductions ---Salary---Rectification--­Balance payment with return---Expenses of salary allowed--­Disallowance by way of rectification ---Validity---Company/assessee having filed return after settlement of the accounts by its employee with the Tax Department by payment of tax as per return filed, the rigors of S.24(c) of the Income Tax Ordinance. 1979 became inapplicable----Purpose behind the legislation was not to disallow verifiable expenses but to ensure prompt and timely payment of taxes by the people who receive salary---Spirit of law should not be ignored as such provisions should also only be invoked when they apply in letter and spirit on the facts and circumstances of the case---Rectification was a void action and its disapproval by the First Appellate Authority was quite justified. (b) Income Tax Ordinance (XXXI of 1979)--- ----S.24(c)---inadmissible deduction---Word "sum"---Interpretation---Key words used in S.24(c) of the Income Tax Ordinance, 1979 were "any sum paid to any person"---Word "sum" could not be interpreted as to include delivery of goods---"Sum" represents payment made in cash and not in kind and did not represent anything other than cash. 1968 PTD 724 rel. (c) Interpretation, of statutes--- ---- Spirit of law should not be ignored as such provisions should also only be invoked when they apply in letter and spirit on the facts and circumstances of the case. (d) Income Tax Ordinance (XXXI of 1979)--- ----Ss. 24(c), 50(4)(a) & 156---Inadmissible deduction---Commission and discount---Payment of, in kind---Disallowance on account of non-deduction of tax---Validity---"Sum paid" means cash payment and not the payment in kind---Distribution of ball point pencils to its distributors on their good performance free of cost could trot be considered as "sum paid" and thus the provisions of S.50(4)(a) and of S.24(c) of the Income Tax Ordinance also remained inapplicable---Issue set aside by the First Appellate Authority was considered as insufficient relief as the case was that of cancellation of the rectification order under 5.156 of the Income Tax Ordinance,…

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