Law: Income Tax Ordinance, 1979

Section: 24,24(c),50(4A),FourthSched.,

(a) Income Tax Ordinance (XXXI of 1979)----Ss. 24(c) & 50(4A)---Deduction not admissible---Insurance-company--Addition was made by rejecting the pleas of the assessee that no element of payment was involved in commission transaction and it was a general practice of insurance companies that premium in respect of insurance business ceded by other insurance companies was distributed after charging their commission/service charges and no physical payments were involved in these transactions---Validity---Assessee had incurred the expenses through general entry and such expenses could not be disallowed---First Appellate Authority had rightly deleted the additions made under S.24(c) as well as charge of tax under S.50(4A) of the Income Tax Ordinance, 1979. 2003 PTD 589; 1999 PTD (Trib.) 2172 and 2002 PTD (Trib.) 1952 rel. (b) Income Tax Ordinance (XXXI of 1979)--- ----Ss. 24 & Fourth Sched., R. 5(c)---Insurance Act (IV of 1938), S.40C---Insurance Ordinance (XXXIX of 2000), Ss.167(h) & 56(s)---Insurance Rules, 1958, Preamble--Deduction not admissible---Insurance company---Management expenses. .-Curtailment of-Validity-Taxation Officer disallowed the claim of management expenses following R.5(c) of the Fourth Schedule of the Income Tax Ordinance, 1979 which had become redundant due to the repeal of Insurance Ordinance, 2000 and the subsequent rules made thereunder---First Appellate Authority rightly deleted the disallowance with the observation that "the fact cannot be denied that the provisions of law on which the Assessing Officer had relied for making the addition did not exist at the time of assessment"---No limitation as to the curtailment of management expenses had been laid down by the rules made by the Securities and Exchange Commission of Pakistan---Curtailment of expenses having been based on non-existent provisions were deleted and departmental appeal was dismissed by the Appellate Tribunal. 1991 SC 842 (sic); 2005 PTD (Trib.) 474 and Messrs Premier Insurance Company's case I.T.A. No.2171/KB of 2001 ref. ORDER Through this appeal, the appellant-Department has objected to the impugned order of the learned C.I.T. (A), dated 11-2-2006 for the…

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