MIRZA BOOK AGENCY VS COMMISSIONER OF INCOME TAX, ZONE-B, LAHORE
1996 P T D 1123
[Lahore High Court]
Before Malik Muhammad Qayyum and Ahmad Saeed Awan, JJ
MIRZA BOOK AGENCY
Versus
COMMISSIONER OF INCOME TAX, ZONE-B, LAHORE
Civil Tax Reference No. 12 of 1987, decided on 13/03/1996.
Income-tax Act (XI of 1922)---
----S.15-AA---Investment rebate---Straight deduction ---Admissibility-- Investment by assessee on purchase of Defence Saving Certificates---Held, assessee was entitled to a rebate under S.15-AA, Income-tax Act, 1922 and not to a deduction from the taxable income.
Applicant in person.
Shahbaz Butt and Zahid Pervaiz for Respondents.
Date of hearing: 13th March, 1996.
JUDGMENT
AHMAD SAEED AWAN, J.---This reference under section 136(1) of the Income Tax Ordinance, 1979; made at the instance of the applicant M/s. Mirza Book Agency, Lahore; the Income Tax Appellate Tribunal has referred the following question of law to this Court for opinion:--
"Whether on the facts and in the circumstances of the case, the Appellate Tribunal was justified in allowing rebate on investment instead of straight deduction of the amount of investment from the total income?"
2. This reference pertains to assessment year 1976-77; the material facts of the case briefly are that the appellant firm invested Rs.20,000 towards the purchase of Defence Saving Certificates on which the rebate was allowed by the Income Tax Officer. The appellant firm aggrieved by the order, preferred an appeal; the Appellate Assistant Commissioner accepted the appeal and directed that the investment be allowed as a straight deduction from the income of appellant registered firm. The department being dissatisfied with the order of Appellate Assistant Commissioner; preferred department appeal which was accepted. Aggrieved by the order of the learned Tribunal; the appellant sought for reference to this Court and accordingly the Tribunal has referred the question set out above for our opinion.
3. We have carefully considered section 1,5-AA and section 16(1) of the Income-tax Act, 1922. The contention of the appellant that the amount invested for the purchase of postal certificates as well as other certificates including Defence Saving Certificate as mentioned in section 15-AA of the Act; a straight deduction would be available for the said amount is misconceived; as the concept of "Taxation Income" was neither available under the Income-tax Act, 1922 nor in the Ordinance 1979; but is always available in the Finance Act Ordinance for each year for a limited purpose. The First Schedule of the Finance Act, 1976, defined the expression. "Taxable Income" for the purpose of levying tax and sub-para. (b) of explanation to the First Schedule laid down:---
"(b) In any other case, the total income of an assessee as diminished by the allowance admissible under the first and third proviso to subsection (1) of section 7, section 15, section 15-A, section 15-AA, section 15-C, section 15-CC, section 15-CCC, section 15-D, section 15-F, section 15-H, section 15-HH, section 58-F and section 58-W of the Income-tax Act, 1922 (XI of 1922). "
clearly envisages that the appellant firm was entitled to a rebate and not to a deduction from the taxable income. The learned Tribunal rightly observed that only rebate was allowed according to section 15-AA of the Income-tax Act, 1922.
4. In view of the above, we answer the question referred to us in the positive against the appellant, in the facts and circumstances of the case, there shall be no order as to costs.
M.B.A./M.89/Lah.Question answered in affirmative.