Law: Income Tax Ordinance, 1979

Section: 10(2)(x),10(5),12,12(19),16(2),17,18,24, 31,32,23(1)(viii),23(1)(xxii)(b),66A,Fir stSched.,PartV,Para.A,12(19),Third ScheduleR.1,R.7,SecondSched.,PartI,Cl.(9 1)

(a) Income Tax Ordinance (XXXI of 1979) S. 23(1)(viii) Deduction Bonus, disallowance of Assessee a banking company Amount of bonus was disallowed on the ground that it was merely a provision and not actual payment Assessee contended that bonus payable to assessee's staff was an ascertainable liability and same was admissible under mercantile system of accounting even if not paid in the same year Validity Provision for bonus could not just be disallowed Department having no case with regard to its non- verifiability or that it was not as per terms of the employment or that it was against the previous practice of the assessee or a part of which had not been paid in the subsequent year, could not disallow the same under the garb that it was only a provision Amount of bonus halving properly been claimed as per terms of employment with the employees and being normal practice of the asse9see and also for the reason that the assessee had mercantile method of accounting was allowed in full Addition was deleted by the Appellate Tribunal being illegal. 1985 PTD 413 and 1990 PTD 248 ref. (b) Income Tax Ordinance (XXXI of 1979) S. 66A, First Sched., Part V, Para. A Powers of Inspecting Additional Commissioner to revise Deputy Commissioner's order Dividend income was assessed @ 5 % as separate block of income -Taxation of, at the rate applicable to normal business income by the Inspecting Additional Commissioner was cancelled, by the Appellate Tribunal and original order was restored. 1996 PTD 276; 1974 PTD 41 and 2000 PTD 507 rel. (c) Income Tax Ordinance (XXXI of 1079) Ss. 66A, 12(19) & Third Sched., R.1 Powers of Inspecting Additional Commissioner to revise Deputy Commissioner's order -Lease income Allowance of depreciation Lease rent Assessee contended that Inspecting Additional Commissioner worked out the amount of lease rental primarily on hypothetical basis without looking at the lease rentals actually recorded in the books of the assessee and ignored to allow corresponding tax depreciation Validity Appellate Tribunal set aside the orders with the directions to provide an opportunity to the assessee to provide details of actual lease rentals received and with…

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