Law: Income Tax Ordinance, 1979

Section: 23(1)(v),34,35,38,22,23,2(8),2(26)(c)Exp ln.,9(1A),FirstSched.

(a) Income Tax Ordinance (XXXI of 1979)----Ss. 2(8), 2(26)(c) Expln., 9(1A) & First Sched., Part V, Para. B--­Modaraba Companies Rules, 1981, R.2---Assessment year---Income year---Determination of first assessment year---Exemption---Application of reduced rate---Minimum subscription certificate was obtained by the Modaraba as on 11th of April, 1990 and-closed its account for the first year on 30th June, 1991---Assessee contended that since the first account; were closed on 30th June, 1991 the first assessment year involved was the assessment year 1991-92 and no tax should have been charged on the Madaraba income for the assessment year 1993-94 as provided in S.9(1A) of the Income Tax Ordinance, 1979---Validity---First assessment year was the assessment year 1990-91---Income of Modaraba was exempt under specific circumstances for the assessment years 1990-91, 991-92 and 1992-93---First Appellate Authority rightly upheld the departmental view that income of the Modaraba for the assessment year 93-94 was taxable---Reduced rate of tax for the two years next to the exemption period was applicable in the assessment years 1993-94 and 1994-95 and the Modaraba was rightly charged to tax at the normal rate of 25% in the assessment year 1995-96 as held by the First Appellate Authority. I.T.A. No. 944/KB of 1997-98 and I.T.A. No. 970/KB of 1997-98 distinguished. (b) Income Tax Ordinance (XXXI of 1979)--- ----S. 23(1)(x)--Deduction---Bad debts, disallowance of---Provisions for bad debts were disallowed by holding that debts involved were not yet mature to be written off---Such treatment was confirmed by the First Appellate Authority ---Assessee had not brought any evidence before the Tribunal to convince that the conditions as provided in S.23(1)(x) of the Ordinance had been satisfied---Order of the Authorities below was maintained by the Appellate Tribunal. (c) Income Tax Ordinance (XXXI of 1979)--- ----Ss. 22 & 23---Income from business or profession ---Deduction--­Computation of income or loss---Various activities---Allowability of proportionate expenses---Procedure---Income or loss of various businesses of assessee were to be computed independently keeping in…

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