Income Tax Ordinance (XXXI of 1979)‑‑‑

-‑‑Ss. 80‑D & 80‑C‑‑‑Minimum tax on income of certain persons‑‑‑First Appellate Authority directed the Assessing Officer to take into consideration the amount of tax paid by the assessee under S.80‑C of the income Tax Ordinance, 1979 at the time of working of tax under S.80‑D of the Income Tax Ordinance, 1979 and turnover under S.80‑C of the Income Tax Ordinance, 1979 should also be included in the total turnover for purpose of working‑‑‑Validity‑‑‑Department failed to establish that the tax paid under the provisions of S.80‑C of the Income Tax Ordinance, 1979 was excluded from the total tax payable under the provision of S.80‑D of the Income Tax Ordinance, 1979‑‑‑In the provision of Explanation to S.80‑D of the Income Tax Ordinance, 1979 it was clarified that turnover meant the gross receipts, exclusive of trade discount shown on invoices or bills, derived from sale of goods or from rendering, giving or supplying services or benefit or from execution of contracts‑‑‑Provisions of S.80‑D of the Income Tax Ordinance, 1979 did not exclude the turnover and tax paid under S.80‑C of the Income Tax Ordinance, 1979 for the purposes of working out minimum tax liability under said section‑‑‑Order of First Appellate Authority being fully justified was upheld by the Appellate Tribunal and appeal of the Revenue failed.

Javaid Iqbal Rana, D.R. for Appellant.

Shaukat Amin, F.C.A. for Respondent.

Date of hearing: 12th November, 1999.

ORDER

KHALID WAHEED AHMAD (JUDICIAL MEMBER).‑‑‑This departmental appeal pertaining to assessment year 1996‑97 is directed against the order, dated 17‑8‑1998 of CIT(A) Zone‑II, Lahore.

2. D.R. is present on behalf of the Revenue while the assessee is represented by the A.R.

3. The brief facts of the case are that assessee is a private limited company which derives income from contracts. The Assessing Officer levied working of minimum tax under section 80D of the Income Tax Ordinance on company's total turnover. On appeal before the First Appellate Authority the assessee contested the action of the Assessing Officer on the ground that amount of tax paid at Rs.32,363 under section 80C should also be considered while working out tax under section 80D of the Ordinance. After finding the contention of the assessee to be legally justified, the CIT(A) passed the following direction:‑‑‑

"The ITO is directed to take into consideration the amount of tax paid by the appellant under section 80C at the time of working of tax under section 80D and turnover under section 80C should use he included in the total turnover for the purpose of working."

4. Aggrieved by the action of the First Appellate Authority the Department has now come up in appeal before us contesting the impugned order on the following ground:‑‑‑

"That the appellate authority was not justified in directing that the receipts covered under section 80C of the Income Tax Ordinance, 1979 and tax deducted thereon may also be considered for the purpose of calculation of liability under section 80D. On the other hand the Assessing Officer is of the view that the receipts and tax under section 80C is a separate block and has nothing to do with those attracting 80D."

5. The learned D.R. while supporting the grounds of appeal of the Revenue contended that sections 80C and 80D are two separate and independent charging sections, therefore, CIT(A) was not justified in directing to take into consideration the amount of tax paid by the assessee/respondent under section 80C at the time of working out of tax under section 80D and that turnover under section 80C of the Income Tax Ordinance should also be included in the total turnover for the purpose of working out tax under section 80D.

6. Learned A.R. while arguing on behalf of the assessee; respondent contended that under the provisions of section 80D of Income Tax Ordinance, 1979 the total tax paid by the assessee is to be accounted for. Learned A.R. further submitted that the word used tax payable or paid in the said section means the total tax paid or payable under the Income Tax Ordinance from all the sources.

7. Arguments of both the parties have been heard. Orders of two authorities below have been examined as well as provisions of section 80D of Income Tax Ordinance, 1979 perused. Learned D.R. has failed to establish that the tax paid under the provisions of section 80C of Income Tax Ordinance, 1979 is excluded from the total tax payable under the provisions of section 80‑D of the Ordinance. In the explanation to section 80D it is clarified that turnover means the gross receipts, exclusive of trade discount shown of invoices or bills, derived from sale of goods or from rendering, giving or supplying services or benefits or from execution of contracts. The provisions of section 80D does not exclude the turnover and tax paid under section 80C for the purpose of working out minimum tax liability under this section. Order of the First Appellate Authority being fully justified is hereby upheld. The appeal of the Revenue fails.

C.M.A./552/Tax (Trib.)??????????????????????????????????????????????????????????????????????? Appeal dismissed.