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MESSRS SHIFA INTERNATIONAL HOSPITAL, ISLAMABAD versus COMMISSIONER OF INCOME TAX/WEALTH TAX, ISLAMABAD

23 Section 23 and Third Schedule Entry I and II - Hospital Building Depreciation Allowance - "Factory" or "Workshop" c Skype - Depreciation allowance for buildings was 5% [Admission of Third Schedule to Income Tax Ordinance 19791, while 1979 "It was 10% for factory * or uworkshopn [Third Schedule II of Income Tax Ordinance 1979] - the question was whether the hospital could be considered a" factory "or" workshop "? Entitling an allowance - an hospital when it was a closed house structure, however, could not be considered to fall under the definition of a factory or a "workshop". It was not a building where the goods were manufactured, repaired or stored thus the hospital, therefore entitled to a small allowance at the normal rate of 5% instead of just 10% - Request for Appeal Accordingly [P138] B was excluded

PLD 2017 Supreme Court 134

Present: Mian Saqib Nisar, C.J.,

Ejaz Afzal Khan and Umar Ata Bandial, JJ

Messrs SHIFA INTERNATIONAL HOSPITAL, ISLAMABAD—Petitioner

versus

COMMISSIONER OF INCOME TAX/WEALTH TAX, ISLAMABAD—Respondent

Civil Petition No.2640 of 2016, decided on 2nd February, 2017.

(Against the judgment dated 31-5-2016 of the Islamabad High Court, Islamabad passed in I.T.R. No.24 of 2008).

(a) Interpretation of statutes—

—Fiscal statute—Provisions of a fiscal statute were to be strictly construed and applied. [p. 138] A

(b) Income Tax Ordinance (XXXI of 1979) [since repealed]-

—S. 23 & Third Sched. Entry I & II—Hospital building— Depreciation allowance—“Factory” or “workshop”—Scope—

Deprecation allowance allowed for buildings was 5% [Entry I of Third Sched. to the Income Tax Ordinance, 19791, whereas for “factory* or uworkshopn it was 10% [Entry II of Third Sched. to the Income Tax Ordinance, 1979]—Question was whether a hospital could be considered as a "factory" or "workshop", entitling it to 10% depreciation allowance—Hospital whilst being an enclosed structure was undoubtedly a building, however, by no stretch of imagination could it be considered to fall within the definition of a *factory ” or “workshopn as it was not a building where goods were manufactured, repaired or assembled—Hospital was, thus, only entitled todepreciation allowance at the general rate of 5% instead of 10%— Petition for leave to appeal was dismissed accordingly. [p. 138] B

Commissioner of Income Tax v. Dr. B. Venkahta Rao 2001 PTD 1124 and Commissioner of Income Tax v. Dr. B. Venkata Rao [(1993) 202 ITR 303] distinguished.

(c) Precedent—

—Judgments from foreign (Indian) jurisdiction—Scope—Such judgments may be relevant in understanding and resolving the issues before the courts but had no binding effect upon the courts in Pakistan. [p. 138] C

Hafiz Muhammad Idrees, Advocate Supreme Court for Petitioner.

Babar Bilal, Advocate Supreme Court and Ms. Shazia Bilal, Advocate Supreme Court for Respondents.

Date of hearing: 2nd February, 2017.

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