Law: Income Tax Ordinance, 1979

Section: 50(2A),50(7D),2(16)(b)(a),24(c),62

(a) Income Tax Ordinance (XXXI of 1979)------Ss. 50(7D) & 2(16)(b)(a)---Deduction of tax at source---" Company"--Definition---Words 'instrument of any kind issued' have been used within the context of such instrument issued by any banking company, arty company referred to in sub-clauses (a) & (b) of cl. (16) of S.2 of the Income Tax Ordinance, 1979 'relating to the definition of a "company". (b) Income Tax Ordinance (XXXI of 1979)----- ----S. 50(7D)---Deduction of tax at source---Instrument---Resolution of Board of Directors---Relationship between the holding company and the subsidiary company or two sister companies for making payment of borrowed sums or making payment of interest on the borrowed sums would stand covered by the provisions of S.50(7D) of the Income Tax Ordinance, 1979 which arrangement was created by a resolution of the Board of Directors and such resolution fell within, the scope of instrument stated in the provisions of S.50(7D) of the Income Tax Ordinance, 1979. Black's Law Dictionary and Law Lexicon ref. (c) Income Tax Ordinance (XXXI of 1979)--- ----Ss. 24(c) & 50(7D)---Deductions not admissible---Financial expenses/charges claimed, which were paid by the assessee to its holding company on the balance due to it on account of funds borrowed after adjustment -of sales, was disallowed---Addition was deleted by the First Appellate Authority---Appeal by Department ---Assessee contended that the recipient had discharged its liability and the addition under S.24(c) of the Income Tax Ordinance, 1979 could not be made ---Validity---Matter was to be re-thrashed and re-probed for a decision afresh---Issue was set aside with the direction that the Assessing Officer will consider the contentions of the assessee after affording him proper opportunity and to verify the facts as alleged before the Assessing Officer from the record of assessment of the holding company and also to verify the evidence already produced by the assessee or which might be produced by the assessee from the assessment record of the holding company which could be summoned which NTN was available on record on the certificate issued from the holding company---Order was…

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