Law: Income Tax Ordinance, 1979

Section: 23,23(1)(viii)(b)

Law: Sindh Industrial Relations Rules, 1973

Section: 69

Law: Industrial Relations Ordinance (XXIII of 1969)

Section: 30(4),54

(a) Income Tax Ordinance (XXXI of 1979)----S. 23---Deductions---Golden Hand Shake Scheme expenses ---Re -employment of such employees---Disallowance of expenses ---Validity---Assessing Officer had made a factual mistake while making a disallowance regarding eight employees---Only four employees had been re-employed, the disallowance if any should have to be restricted 'to the payment of only to such employees---Appellate Tribunal set aside the order with the, direction that the copy of Golden Hand Shake Scheme might be obtained and if the Scheme was available to all the employees then total claim may be allowed and in the case of Scheme not available to all the employees then the addition under, the head of Golden Hand Shake Scheme may be restricted to the payment made to the four employees on account of the Scheme. (b) Income Tax Ordinance (XXXI of 1979)--- ----S. 23(1)(viii)(b)---Industrial Relations Ordinance (XXIII of 1969), Ss.30(4) & 54---Sindh Industrial Relations Rules, 1973, R.69---Bonus--- Bonus paid up to 60.1 % of the profit, in compliance with the provisions of Industrial Relations Ordinance, 1969, was considered by Assessing Officer as unreasonable and he allowed the bonus up to 30% of the profits and disallowed half of the claim---Validity---Assessing Officer was not justified in disallowing the claim of bonus, both for the factory workers and office employees as it was paid in accordance with the terms of Settlement with Collective Bargaining Agent (CBA) under S.30(4) of the Industrial Relations Ordinance, 1969 read with R.69 of the Sindh Industrial Relations Rules, 1973, the payment being statutory obligation and the assessee in case of failure to pay was punishable with penalty and imprisonment under S.54 of the Industrial Relations Ordinance, 1969 meaning thereby that the failure to make payment would have resulted in the closure of business due to strike by the labour---Regarding co-relation of bonus with profit, the three conditions as laid down in S.23(1)(viii)(b) of the Income Tax Ordinance, 1979 were cumulative and were to be considered together---"Profit" referred in law was the profit before charge of depreciation and payment of…

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