| Case ID |
7f9303bc-58c6-4a54-b97a-410dcd1aeeb4 |
| Body |
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| Case Number |
Civil Appeal No. 31 of 1988 |
| Decision Date |
Jun 05, 1991 |
| Hearing Date |
|
| Decision |
The appeal by the assessee was dismissed with costs. The High Court Division's ruling was upheld, stating that the expenses incurred by the assessee were not allowable under section 10(2)(xvi) of the Income Tax Act, 1922, as they were not incurred for the purpose of carrying on business in Bangladesh. The Tribunal's findings were deemed unreasonable and perverse as the expenditures were made in the context of closing down the business rather than for its operation. The principle of law established is that the Tribunal has the authority to decide questions of fact, while the High Court Division acts in an advisory capacity under section 66 of the Act. |
| Summary |
This case revolves around the appeal of Machinnon Mackenzie & Company (Pakistan) Ltd, a non-resident company that claimed deductions for expenses incurred during the closure of its business in Bangladesh. The Supreme Court of Bangladesh reviewed the decision of the High Court Division, which had upheld the disallowance of these deductions under the Income Tax Act, 1922. The key legal principles addressed involve the interpretation of what constitutes allowable business expenses, particularly in the context of a company that has ceased operations. The court highlighted that expenses incurred during the winding down of business do not qualify for deductions as they are not made for the purpose of conducting business. The decision underscores the importance of evidence in supporting claims for tax deductions and clarifies the roles of the Tribunal and High Court in such matters. This case serves as a significant reference for future disputes regarding tax deductions for closing businesses and emphasizes the need for clear documentation and justifiable claims in tax matters. |
| Court |
Supreme Court of Bangladesh
|
| Entities Involved |
MACHINNON MACKENZIE & COMPANY (PAKISTAN) LTD,
COMMISSIONER OF TAXES, CHITTAGONG (SOUTH) ZONE, CHITTAGONG
|
| Judges |
M.H. RAHMAN,
A.T.M. AFZAL,
MUSTAFA KAMAL
|
| Lawyers |
Syed Ishtiaq Ahmed, Senior Advocate,
Md. Aftab Hussain, Advocate-on-Record,
Moksudur Rahman, Senior Advocate Supreme Court,
Md. Sajjadul Haq, Advocate-on-Record
|
| Petitioners |
MACHINNON MACKENZIE & COMPANY (PAKISTAN) LTD
|
| Respondents |
COMMISSIONER OF TAXES, CHITTAGONG (SOUTH) ZONE, CHITTAGONG
|
| Citations |
1992 SLD 196,
1992 PTD 1359,
(1992) 66 TAX 195
|
| Other Citations |
Commissioner of Income Tax, Kerala v. Malayalam Plantations Ltd. (1964) 53 ITR (SC) 140
|
| Laws Involved |
Income Tax Act, 1922
|
| Sections |
66,
10(2)(xvi)
|