Law: Income Tax Ordinance, 1979

Section: 30,22,72

Income Tax Ordinance (XXXI of 1979)---Ss. 30, 22 & 72---Income from other sources---Interest income---No business income---Business expenses---Set-off against interest income--­No notice for discontinuation of business---First Appellate Authority found that business expenses could be set-off against income under S.30 of the Income Tax Ordinance, 1979---Validity---Assessing Officer without issuing notice to the assessee under S.72 of the Income Tax Ordinance,. 1979 was not justified in not setting off the business loss on account of expenses against the other income because the assessee had not discontinued its business but was under temporary lull in the business and the expenditure incurred by the assessee were incurred in carrying on the business, and were allowable and the Assessing Officer had erred in not assessing business loss under the provision of S.22 of the Income Tax Ordinance, 1979---First Appellate Authority rightly directed to allow all the business expenses which were verifiable and necessary to maintain registered office of the assessee and had been incurred in execution of statutory obligation of the company---Order of the First Appellate Authority was upheld and the departmental appeal was dismissed by the Tribunal. Kirk & Randle Limited v. Dunn 8 TC 663 and (1969) 72 ITR 114 ref (1935) 3 ITR 350 rel. (1996) 73 Tax 10 (Trib.) and Messrs Zaheer Sancho (Pvt.) Ltd.'s case I. T. As. Nos. 1669 to 1671 /KB of 1998-99 distinguished. THIS ORDER PASSED BY : JAVAID MASOOD TAHIR BHATTI (JUDICIAL MEMBER).--­The Department through this appeal has objected to the order of the learned CIT(A), dated 7'-4-2000, on the sole ground that the learned CIT(A) was not justified in holding that the business expenses can be set off against income under section 30 of the Income Tax Ordinance, 1979. 2. Mr. Zaki Ahmad, learned representative of the appellant department has contended that the assessee was previously acting as shipping agent and derived commission income from handling vessel of the American President Lines of Oklohama USA, the agency agreement was subsequently terminated with effect from October 1997. As a result of agency termination no agency fee…

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