Law: Income Tax Ordinance, 1979

Section: 12(9A),FirstSched,PartIV,Cis.(59),(136)

(a) Income Tax Ordinance (XXXI of 1979)---S. 12(9A)---Income deemed to accrue or .arise in Pakistan---If the Department could add capital expenditure claim in Profit and Loss Account for determining the net income conversely it could not be allowed to add the previous years profit for determining. the profit of the assessee for the year. (b) Income-tax----- ----Income---Profit---Meanings---Income has different connotation but all profits are covered within the definition of income---Income has a wider connotation and profit is a part of it, however, a comprehensive and direct definition for the profit is not available. (c) Income Tax Ordinance (XXXI of 1979)----- ----S. 12(9A) & First Sched, Part IV, Cis. (59) . & (136)---Income deemed to accrue or arise in Pakistan---Application for reference to High Court--Addition was deleted by the Appellate Tribunal. by modifying amount of "after, tax profit" i,e. after deducting previous year profits from such profit, while the assessee himself declared its "after tax profit" in its printed accounts by including previous year profit--Validity ---Assessee had not added the previous year profit in its profit for the purposes of S.12(9A) of the Income Tax Ordinance, 1979 which was for determination of the funds available with the Company/assessee to know the liquidatory position---Same had got nothing to do with the requirement of S.12(9A) read with Cl: (59) of Part IV of the First Schedule of the Income Tax Ordinance, 1979---Reference application . was dismissed by the Appellate Tribunal. Biria Brothers (Pvt.) Ltd v. CIT (1966) 13 Tax 76 and Shiri, Vastava and Sons (P.) Ltd. v. CIT (1963) 47 ITR 49 rel. (d) Income Tax Ordinance (XXXI of 1979)--- ----S. 12(9A)---Interpretation---Provision of S.12(9A) of the Income Tax Ordinance, 1979 is a deemed provision of law which had to be applied strictly---Benefit of doubt, by all means goes to the assessee---Section 12(9A), Income Tax Ordinance, 1979 treats an amount to be taxable income which otherwise under normal charging provision may not be an income of the assessee. (e) Interpretation of statutes----- ---- Liberal interpretation is the essence of justice. ORDER KHAWAJA…

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