(a) Income Tax Ordinance (XXXI of 1979)---

----Second Schedule, Cl. 83 (before amendment)---Word `payable'-- Interpretation---If the liability to pay wealth tax had arisen, the assessee was entitled to claim it as expenditure irrespective of the fact whether or not the tax had actually been paid during the charge year.

(b) Interpretation of statutes---

---Words used in a statutory instrument are to be construed in their ordinary and natural sense and if different words are used by the Legislature, the object is to convey different meaning, unless the context otherwise requires.

(c) Income Tax Ordinance (SCI of 1979)---

----Second Schedule Cl. 83 (before amendment)---Expression `payable' cannot be construed as paid---`Payable' and `paid'---Connotations.

Ballantine's Law Dictionary Third Edition p.525 and Black's Law Dictionary Fifth Edn. p.1016 ref.

(d) Interpretation of statutes---

----Amendment---When legislature brings about an amendment the intention generally is to bring about a change.

(e) Words and phrases-

--- `Payable' and `paid'---Connotations.

Ballantine's Law Dictionary Third Edition p.525 and Black's Law Dictionary Fifth Edn. p.1016 ref.

M. Ilyas Khan and Ch. Muhammad Ishaque for Petitioner.

M. Amin Butt for Respondent.

Date of hearing: 10th February, 1991.

JUDGMENT

M. MAHBOOB AHMAD, CJ.--- This order shall dispose of Tax Reference No.36 of 1988, P.T.R. No.60 of 1988, P.T.R. No.5 of 1986 and P.T.R. No24 of 1988 as in all of them common question of law arises for consideration.

2. For the assessment year 1979-80, the assessee respondent in all these cases claimed deduction of wealth tax payable as an admissible expenditure. The Income Tax Officer disallowed the claim holding that as actual payment had not been made during the assessment year in question, the respondents were not entitled to deduct the same from income. However, on appeal, the Commissioner of Income Tax (Appeals) took the view that wealth tax was an admissible expenditure irrespective of the fact whether the payment had actually been made or not. This order of the Commissioner of Income-tax was challenged in second appeals by the department but without success as the income Tax Appellate Tribunal rejected the same on 13th January, 1988.

3. The applicant applied to the learned Income Tax Appellate Tribunal for referring the following question said to be of law and arising from the order of the Tribunal, dated 13th January, 1988 to this Court for its opinion:--

"Whether on the facts and in the circumstances of the case, the Tribunal was justified in allowing the wealth tax liability as an admissible deduction?"

This request was refused by the Income Tax Appellate Tribunal on 29th June, 1988 on the ground that no proposition of law was involved therein.

4. Mr. Muhammad Ilyas Khan, learned counsel for tile petitioner contended that on no reasonable principle the wealth tax, which though due, had not been paid by the assessee could be claimed as an admissible deduction out of the income. The learned counsel emphasized that if the interpretation placed upon by the learned Commissioner of Income-tax on clause 83 of the second schedule to the Income Tax Ordinance, 1979, was accepted, it would amount to allowing the assessee to claim benefit of an expenditure which had not yet been incurred by him. .

5. Mr. Muhammad Amin Butt, learned counsel appearing on behalf of the respondent, on the other hand, contended that the legislature had specifically used the word `payable' in the second schedule which cannot be equated with `paid'. According to the learned counsel an assessee is entitled to claim the deduction on account of wealth tax, once the liability has arisen irrespective of the fact whether the payment had been made in the charge year or not.

6. From the respective contentions of the parties, it would be seen that the dispute revolves around the interpretation of the word `payable' appearing in clause 83 of the second schedule to the Income Tax Ordinance which reads as under:--

"(83) Any amount payable by an assessee by way of wealth tax leviable under the Wealth Tax Act, 1963 (XV of 1963);

Provided that where any person for any year--

(a) is liable to income-tax and also to the wealth tax payable under the Wealth Tax Act, 1063 (XV of 1963); and.

(b) his taxable income under the Income Tax Ordinance, 1979, exceeds one hundred thousand rupees; and

(c) the aggregate amount of income-tax and wealth tax payable by him exceeds seventy-five per cent of his total income.

the income-tax payable by him shall be reduced by the amount by which the said aggregate amount exceeds seventy-five per cent of his total income."

By the Finance Ordinance, 1980 this clause was substituted to read that:--

"(83) Any amount paid by an assessee by way of wealth tax under the Wealth Tax Act, 1963 (XV of 1963).

(83-A) Limit on the income-tax payable.

In 1981 the second schedule as a whole was substituted by the Finance Ordinance, 1981. The relevant clause in the new Schedule was clause 129 which `is reproduced as under:--

"(129) Any amount paid by an assessee by way of wealth tax under the Wealth Tax Act, 1963 (XV of 1963)."

7. While interpreting clause 83, ibid, the learned Commissioner of Income Tax (Appeals) took the view, which was subscribed to by the learned Income Tax, Appellate Tribunal, that if the liability to pay wealth tax had arisen, the assessee is entitled to claim it as expenditure irrespective of the fact whether or not the tax had actually been paid during that year.

8. Having heard the learned counsel for the parties and considered their respective contentions, we are inclined to agree with the learned Income Tax Appellate Tribunal and do not feel persuaded to hold that it is only when the wealth tax had actually been paid that it can be claimed as expenditure. Such an interpretation, in our view, would amount to reading the word 'payable' appearing in clause 83 as `paid' for which there appears to be no warrant or justification.

9. It is well-settled and needs no authority that the words used in a statutory instrument are to be construed in their ordinary and natural sense and if different words are used by the legislature, the object is to convey different meanings, unless the context otherwise requires. In the present case, there is no compulsion to construe 'payable' as `paid'. The expression `paid' and 'payable' have different connotations. While 'payable' has reference to liability which has accrued, the expression `paid' necessarily imports the idea of actual payment. In Ballantines Law Dictionary Third Edition at page 525 'payable' has been defined as `due or to be paid'. According to the same Dictionary, at page 908 `paid' means `recompensed by actual receipt of money or an equivalent in value'. Similarly, according to the Black's Law Dictionary Fifth Edition, page 1016 `A sum of money s said to be payable when a person is under an obligation to pay it". It is thus obvious that the two words c different meanings and cannot be equated with each other.

10. A reference to the legislative history would also support interpretation. Though in the original clause 83 word `payable' was used but Finance Ordinance, 1980 this word was substituted by' paid. The same position obtains as regards the amendment brought about by Finance Ordinance, 1! It is trite law that when legislature brings about an amendment the intent generally is to bring about a change. In this view of the matter, the learn Income Tax Appellate Tribunal was correct in holding that under the original clause 83, wealth tax could be claimed as an expenditure if the liability arisen even though no actual payment had yet been made in the charge year

11. As regards the objection of the learned counsel for the petitioner t to allow an assessee to deduct wealth tax out of his income without having made any payment, would give him an unfair advantage, suffice it to say t under section 31(b) of the Wealth Act, if the wealth tax is not paid within due date, the assessee renders himself liable to pay additional wealth tax at stipulated rate. This argument of the learned counsel is, therefore, without basis. The decision of the Supreme Court in Commissioner Income Tai Wazir-un-Nisa Begum 1972 S C M R 116 also supports the view which we have taken.

12. For the reasons aforesaid, in our opinion, the answer to the quest: as formulated above has to be in the affirmative.

12. In the circumstances of the case, there shall be no orders as to costs

M.BA./91-C/L Reference answer,