Law: Income Tax Ordinance, 1979

Section: 24(e),24C,163

Law: Income Tax Rules, 1982

Section: 20

[Income Tax Ordinance (XXXI of 1979)].....Sections. 24(e), 24-C & 163...Income Tax Rules, 1982, R.20...Nonresident Banking Company doing business in Pakistan... Head Office expenses, addition of...Scope stated. 2009 PTD 1791, I.T.C. No. 71, 75 and 76 of 1992, dated 8-10-1998 and I.T.A. No. 534 of 1999, dated 8-3-2005 rel. ORDER IRFAN SAADAT KHAN, J.---These Income Tax Appeals have been filed against the consolidated order passed by the learned Income Tax Appellate Tribunal (ITAT) in I.T.A. No.800/HQ of 1990-1991 pertaining to the assessment year 1989-90 and I.T.A. No. 1559/HQ of 1989-90, pertaining to the assessment year 1988-89 by raising the following questions of law. (1) "Whether on the facts and in the circumstances of the case, the learned ITAT appreciated the provisions of law, section 24(e) and the Tax Treaty correctly to allow the total claimed expenses under the head without giving the department chance to examine the nature of expenses claimed and basis of allocation of expenses to limit the claims based on the facts and circumstances of the case? (2) "Whether on the facts and in the circumstances of the case, the learned ITAT was justified to uphold the deletion of addition made under section 24(e) under the head "Head Office Expenses" by the learned CIT (Appeals)? (3) "Whether on the facts and in the circumstances of the case, the words used in the relevant Article VII of the Tax Treaty as `reasonably allocable' executive and general administration expenses gives the department right to examine the nature of expenses and the basis of allocation to determine whether the basis and the expenses covered are reasonable? 2. Mr. Javed Farooqui, the learned counsel appearing in these appeals has submitted that the question No.1 raised in the present Income Tax Appeals (I.T.A.) has already been not pressed by him, which is apparent from the order passed by this court in the present appeals dated 17-10-2000. Hence, so far as question No.1 is concerned the present appeals are dismissed as not pressed. As regards question Nos.2 and 3 are concerned the learned counsel submitted that the learned ITAT neither appreciated the facts…