| Case ID |
21307bf1-606a-4f3c-ace5-0443cb66d157 |
| Body |
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| Case Number |
Income-tax Appeals Nos. 20/KB of 1981-82 and 1516/ |
| Decision Date |
Mar 28, 1985 |
| Hearing Date |
Jan 16, 1985 |
| Decision |
The Income Tax Appellate Tribunal ruled that the amount of entertainment duty collected by the appellant was indeed a trading receipt and should be treated as such for income tax purposes. The tribunal emphasized that the appellant, despite having collected this duty, failed to deposit it with the provincial government, thus circumventing their legal obligation. It was determined that the amounts collected under the West Pakistan Entertainment Duty Act were not merely liabilities but trading profits, reinforcing the principle that the quality and nature of receipts for income tax purposes is fixed at the moment of receipt. The decision allows the appellant to claim a deduction in the year the collected amounts are paid to the relevant authorities. |
| Summary |
The case revolves around the handling of entertainment duty collected by a cinema owner, who was also an appellant in this income tax matter. The Income Tax Appellate Tribunal analyzed whether the collected entertainment duty constituted trading receipts or liabilities. The tribunal found that the appellant had collected a total of Rs. 11,48,309 as entertainment duty but did not remit this amount to the provincial government. This led to a determination that such amounts were trading receipts, as the appellant had a legal obligation to collect and remit these funds. The tribunal's decision underscored the importance of distinguishing between liabilities and trading profits, ultimately concluding that the appellant must treat these funds as income for tax purposes, while still allowing for a deduction when paid to the authorities. This ruling is significant in clarifying the treatment of statutory fees and their implications for income tax assessments, highlighting the need for compliance with statutory obligations in financial dealings. |
| Court |
Income Tax Appellate Tribunal
|
| Entities Involved |
Income Tax Appellate Tribunal,
Provincial Government
|
| Judges |
Farhat Ali Khan,
Ghulam Murtaza Khan
|
| Lawyers |
J.N. Pasha,
Muhammad Farid
|
| Petitioners |
Ghulam Murtaza Khan,
Farhat Ali Khan
|
| Respondents |
Muhammad Farid
|
| Citations |
1985 SLD 139,
1985 PTD 858
|
| Other Citations |
1981 P T D (Trib.) 46,
Chowrangi Sales Bureau (Private Ltd.) v. C. I .T. (1973) 97 I T R 547,
Sin Lair Murray do Co. Private Ltd. v. C. I. T. (1974) 97 I T R 615,
C. I. T. v. Bijli Cotton Mills Ltd. (1970) 76 I T R 625,
Messrs Nishat Talkies and another v. The Director/Collector Excise & Taxation K and another P L D 1976 Kar. 712,
Chowrangi Sales Bureau Ltd. v. State of West Bengal (1961) 12 S T C 535,
Morley v. Tatter Sall 22 T C 5 1,
C. I. T. v. Bijli Cotton Mills Private Ltd. (1979) 116 I T R 60,
Upper India Sugar Exchange Ltd. v. C. I. T. All. High Court (1969) 71 I T R 8,
Sandersons Morgaris v. C. I. T. Cal. H. C. (1979) 75 I T R 433,
C. I. T. v. Karam Chand Thakdi (1979) 117 I T R 621,
C.I.T. v. Messrs Adamjee & Sons (1984) P T D 390
|
| Laws Involved |
Income Tax Act, 1922
|
| Sections |
23,
10(2)(v)
|