Law: Income Tax Ordinance, 1979

Section: 22,23,30,35

Income Tax Ordinance (XXXI of 1979)--Ss. 23, 22, 30 & 35---Deductions---Department contended that set aside of assessment by the First Appellate Authority with the direction to allow expenses claimed as revenue expenses under S.23 of the Income Tax Ordinance, 1979 notwithstanding the fact that no business was conducted and loss computed on account of expenses to be allowed under S.23 of the Income Tax Ordinance, 1979 be set off against interest income was also without any justification---No justification existed in directing to assess loss under S.22 of the Income Tax Ordinance, 1979 and after setting off loss against income under S.30 of the Income Tax Ordinance, 1979, the balance loss to be carried forward to next year as provided under S.35 of the Income Tax Ordinance, 1979---Assessee contended that according to S.34 of the Income Tax Ordinance, 1979, if interest income was assessed under the head "income from other sources" and there was loss under the head "income from business" due to expenses, this business loss will be adjusted against interest income---Validity---First Appellate Authority had set aside the assessments with the direction to assess interest income under S.30 of the Income Tax Ordinance, 1979 under the head "Income from other sources", allow expenses claimed as business expenses under S.23 of the Income Tax Ordinance, 1979 in each year and set off loss against income under S.30 of the Income Tax Ordinance, 1979 in each year and set off loss against income under S.30 of the Income Tax Ordinance, 1979 and the balance loss to be carried forward to the next year as provided under S.35 of the Income Tax Ordinance, 1979---First Appellate Authority having already set aside the assessments, Appellate Tribunal did not interfere with the order in that respect---Taxation Officer was directed that while framing fresh assessment, he should consider the relevant law and precedents. Messrs Greys Leasing Limited v. IAC I.T.A. No.4814/LB of 1997; PTD (Trib.) 85; (1983) 48 Tax 58 (Trib.); 2002 PTD 214; 2003 PTD (Trib.) 1076 and 2005 PTD (Trib.) 621 ref. ORDER Through these two appeals, the Department has objected to the consolidated impugned order of…

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