THE COMMISSIONER OF INCOME-TAX, CENTRAL ZONE `C', KARACHI VS B.D. AVARI
1991 P T D 839
[Karachi High Court]
Before Syed Abdur Rehman and Haziqul Khairi Khan, JJ
THE COMMISSIONER OF INCOME-TAX, CENTRAL ZONE `C', KARACHI
Versus
B.D. AVARI
I.T.R. No. 8 of 1984, heard on 28/02/1991.
(a) Income Tax Ordinance (XXXI of 1979)---
----S. 136(2)---Reference application---Question of law---Questions whether on the facts and in the circumstances of the case the Income-tax Appellate Tribunal was justified in holding the application of the applicant as barred by time and whether Tribunal was justified in holding that Wealth tax liability was admissible deduction under Ss.10(2)(xvi) & 12(2) of the Income-tax Act, 1922 were question of law and Tribunal was not justified in refusing to refer these questions.
(b) Income-tax Act (XI of 1922)---
----Ss. 10 & ~12---Wealth tax paid on any income-yielding asset or property owned by the assessee or held for the purpose of his income, is d6ductible as expenses in computing the assessee's income, profit or gain under Ss. 10 & 12 of Income-tax Act, 1922.
Commissioner of Income-tax, Central Zone "B", Karachi v. Zakia Siddiqui 1989 PTD 135 fol.
(c) Income Tax Ordinance (XXXI of 1979)---
----S. 136---Reference application---Limitation---Reference application filed on or after 1-7-1979 shall be governed by S. 136 of the Ordinance, which provides a period of limitation of 90 days from the date of the service of order of the Tribunal.
I.T.C. No. 113 of 1984 fol.
Waheed Farooqi for Applicant.
Shaikh Haider: Amicus curiae.
Nemo for Respondent.
Date of hearing: 28th February, 1991.
JUDGMENT
SYED ABDUR REHMAN, J.---This is a reference under section 136(2) of Income Tax Ordinance, 1979. By this reference Commissioner of Income-tax, Central Zone "C", Karachi prayed that the following questions may be framed and decided as required by subsection (2) of section 136 of Income Tax Ordinance, 1979:
"(a) Whether on the facts and the circumstances of the case the Tribunal was justified in holding the application of the applicant as barred by time?
(b) Whether on the facts and in the circumstances of the case the learned Income-tax Appellate Tribunal was justified in holding that Wealth tax liability was admissible deduction under sections 10(2)(xvi) and 12(2) of the repealed Act of 1922?"
We accordingly framed both these questions of law as we are satisfied that the Tribunal was not justified in refusing to refer these questions of law. We have heard Mr. Muhammad Iqbal, Advocate holding brief for Mr, Waheed Farooqi, counsel for applicant, and Mr. Shaikh Haider, advocate amicus curie on the point,
Mr. Muhammad Iqbal concedes that there is a D.B. judgment of this Court in the case of Commissioner of Income-tax, Central Zone "C", Karachi v. Zakia Siddiqui, reported in 1989 P T D 135 on the question of law at point (b). We have gone through this judgment and find that the question which was referred by the Tribunal was exactly the same as contained at point (b), ThisCourt after giving exhaustive reasons came to the conclusion that wealth tax paid on any income yielding asset or property owned by the assessee or held for the purpose of his income, is deductible as expenses in computing the assessee's income, profit or gain under sections 10 and 12 of the Income-tax Act, 1922. Mr. Shaikh Haider also states that the latest law on the point is the same which has been given in this report.
Mr. Iqbal Ahmed brought to our notice the unreported judgment in I.T.C. No. 113 of 1984 of this Court wherein question of law at point (a) was referred to this Court for decision, We have also gone through this judgment. We find that a question exactly similar as that of question at point (a) was taken up for consideration In this judgment. After exhaustive discussion on the point the Court came to the conclusion that a reference application filed on or after 1-7-1979 shall be governed by section 136 of the new Ordinance, which provides a period of limitation of 90 days from the date of the service of order of the Tribunal. Mr. Shaikh Haider states that this ruling reflects the settled law on the point.
In this view of the matter we decide both the questions in affirmative. Reference stands disposed of.
M.BA./C-211/K Questions answered in affirmative.