Case ID |
20b0c5bd-fca4-45e0-a2b3-34883dd9f099 |
Body |
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Case Number |
I.T.A. No.955/KB of 1992-93 |
Decision Date |
Apr 29, 1993 |
Hearing Date |
Mar 06, 1993 |
Decision |
The appeal concerning the assessment year 1990-91 was directed against the order of the learned CIT (A) Zone-1, Karachi, which confirmed the disallowance of professional tax claimed by the assessee. The tribunal concluded that the professional tax paid by the assessee is not a tax on income and is therefore not hit by the bar contained in section 24(a) of the Income Tax Ordinance, 1979. The tribunal found that professional tax is an allowable expenditure under section 23(1)(xviii) of the Ordinance, as it is laid out wholly and exclusively for the purpose of carrying on business. The tribunal overruled the earlier decision in ITA No.894/HQ of 1991, emphasizing that professional tax should be claimed under the specific provisions applicable to it. Consequently, the order of the learned CIT(A) was vacated, and the appeal was allowed. |
Summary |
This case revolves around the treatment of professional tax within the framework of the Income Tax Ordinance, 1979. The Appellate Tribunal Inland Revenue was tasked with determining whether the professional tax paid by the assessee was an allowable deduction under the Income Tax Ordinance. The tribunal analyzed the nature of professional tax, concluding that it is not a tax on income, thus not subject to disallowance under section 24(a). The tribunal referenced various legal provisions, including Article 163 of the Constitution of Pakistan and section 11 of the West Pakistan Finance Act, 1964. It emphasized that professional tax is incurred in relation to business premises and is an essential expenditure for maintaining business operations. The tribunal's ruling aligns with principles of tax law that prioritize the allowance of business-related expenditures. The decision sets a precedent for similar cases regarding the interpretation of professional tax as a deductible expense, affirming the rights of taxpayers to claim legitimate business expenses. Keywords: professional tax, Income Tax Ordinance, allowable expenditure, tax law, business expenses, legal precedent. |
Court |
Appellate Tribunal Inland Revenue
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Entities Involved |
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Judges |
Farhat Ali Khan, Chairman,
Syed Kabirul Hassan, Judicial Member,
Muhammad Mushtaq, Accountant Member
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Lawyers |
Mehtab Khan, D.R. for Appellant,
Syed Humayun Zaidi, D.R. for Respondent
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Petitioners |
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Respondents |
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Citations |
1993 SLD 100,
1993 PTD 908,
(1993) 67 TAX 191,
(1994) 69 TAX 106
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Other Citations |
(1972) 63 ITR 352,
(1986) 160 ITR 203,
C.I.T v. Saraswati Industrial Syndicate,
C.I.T., Bihar & Orissa v. Chunilal Rameshwar Lal,
Creaves Cotton & Crompton Parkinson Ltd. v. C.I.T.,
Sanghamehwar Coffee Estates v. State of Karnataka,
Badridas Daga v. Commissioner of Income Tax,
General Tyre and Rubber Company v. C.I.T.,
C.I.T. v. Chunnilal
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Laws Involved |
Income Tax Ordinance, 1979,
Constitution of Pakistan, 1973
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Sections |
10,
23,
24(a),
163
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