| Case ID |
0497a1fe-8b7c-4509-b188-8b7836a88c12 |
| Body |
View case body. Login to View |
| Case Number |
Income Tax Appeal No. 260 of 1999 |
| Decision Date |
Oct 13, 2006 |
| Hearing Date |
|
| Decision |
The Sindh High Court ruled on the applicability of depreciation allowances following a tax holiday period for Globe Textile Mills. The court confirmed that the depreciation should be calculated based on the original cost of assets after the tax holiday, rather than using the written down value. This decision was based on the interpretation of Rule 1(3A) of the Third Schedule of the Income Tax Ordinance, 1979, which the court found did not have retrospective effect. Therefore, the depreciation that was admissible but not allowed during the tax holiday could not be deducted from the actual cost of the assets when determining the written down value. The court emphasized that depreciation calculations should adhere to the established formula in the ordinance, regardless of actual wear and tear. |
| Summary |
This case revolves around the interpretation of the Income Tax Ordinance, specifically concerning depreciation allowances post-tax holiday for Globe Textile Mills. The court examined the implications of Rule 1(3A) introduced by the Finance Act, 1992, which was found not to apply retrospectively to the assessment year in question, 1990-91. The court concluded that depreciation must be calculated on the original cost of assets rather than the written down value after the tax holiday. The decision reaffirmed the importance of adhering to legislative guidelines regarding tax calculations and clarified that the actual wear and tear of assets does not influence the allowable depreciation. This case is significant for entities navigating tax regulations and seeking clarity on depreciation rules in relation to tax holidays. |
| Court |
Sindh High Court
|
| Entities Involved |
GLOBE TEXTILE MILLS (OE) LIMITED,
COMMISSIONER OF INCOME TAX, COMPANIES ZONE I, KARACHI
|
| Judges |
MUHAMMAD MUJEEBULLAH SIDDIQUI,
FAISAL ARAB
|
| Lawyers |
Jawaid Farooqui,
Iqbal Salman Pasha
|
| Petitioners |
COMMISSIONER OF INCOME TAX, COMPANIES ZONE I, KARACHI
|
| Respondents |
GLOBE TEXTILE MILLS (OE) LIMITED, KARACHI
|
| Citations |
2007 SLD 14,
2007 PTCL 543,
2007 PTD 463,
(2007) 95 TAX 306
|
| Other Citations |
Not available
|
| Laws Involved |
Income Tax Ordinance, 1979
|
| Sections |
Third Schedule
|