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Civil Petitions for Special Leave to Appeal Nos. 218 and 219 of 1976, decided on 25th February, 1980.
(On appeal from the judgment and order of the Lahore High Court dated 22‑12‑1975 in T. Rs. Nos. 325‑326 of 1972).
‑S. 10(2), (iv), (v), (xvi) read with Constitution of Pakistan (1973), Art. 185(3)‑‑‑Question whether cases can be decided relying exclusively on English foreign case‑law‑Whether provisions of income‑tax Act, 1922 in pari materia with provisions of Foreign Income tax Act‑Leave to appeal granted to examine questions.
Allahabad Glass Works v. Commissioner of Income‑tax (1962) P T D 327 ref.
Mumtaz Hussain, Advocate with Sh. Masud Akhtar, Advocate‑on‑Record for Petitioner.
Nemo for Respondent.
Date of hearing : 25th February, 1980.
.‑‑The petitioner is a, registered firm which carries on construction business. In the events that happened, it had submitted its income returns for the assessment year 1969‑70 in which it had dis closed a gross profit of nearly 151 on its gross earnings. However, after preparing its accounts, it discovered that it had not claimed depre ciation in the manner prescribed in section 10 of the Income‑tax Act, 1922 (hereinafter called the said Act) on its machinery and equipment. Therefore, it claimed a sum of Rs. 1,29,806 for the same and trans ferred this amount from its trading account into its profit and loss account.
It would appear that the petitioner's assessment for returns of income thus submitted by it was made with the return submitted by it for the assessment year 1970‑71. Nothing turns‑on the details of the returns submitted in this order except that as in the previous year the peti tioner claimed Rs. 97,683 as depreciation of its machinery equipment etc.
The Income‑tax Officer rejected the petitioner's returns and assessed its profits at more than 16 % of its gross receipts for the two assessment years. Further, after thus raising the assessed profits the Income‑tax Officer also rejected the amounts of Rs. 1,29,806 and Rs. 97,683 claimed by the petitioner for depreciation for the assessment years 1969, 1970, 1971 respectively. Therefore, the petitioner challenged these orders in appeals before the Income‑tax Appellate Tribunal, but as these appeals were dismissed, it filed references in the Lahore High Court under sec tion 66(i) of the said Act. Both the references were heard together, because they arose out of similar facts and raised the same question of law. The question was whether the Tribunal was justified in dismissing the petitioner's appeals against the order of the Income‑tax Officer rejecting as inadmissible the petitioner's claim for the deduction of Rs. 1,29,806 and Rs. 97,683 for the assessment years 1969‑70 and 1970‑71 respectively. The references were heard by a Division Bench of the Lahore High Court which decided the question against the petitioner. Hence these petitions for leave.
C. P. S. L. A. 218 of 1976 arises out of the petitioner's claim for deprecia tion on its machinery etc., for the assessment year 1969‑70. Whilst C. P. S. L. A. 219 of 1976 arises out of the petitioner's claim for depreciation on its machinery, etc. for the assessment year 1970‑71.
In rejecting the petitioner's contention, the learned Judges of the High Court have relied exclusively on English case‑law therefore, learned counsel took us through the relevant provisions of the English. Income‑tax Act and the said Act and submitted that as the provisions of the two statutes were rot in part materia the learned Judges had erred in following the English precedents And he took us through the provisions of sec tions 10(2) (iv), 10(2) (v) and 10(2) (xvi) of the said Act and contended that they had been misread.
Both these submissions requires examination, the moreso, as they are supported by an Indian judgment reported in Allahabad Glass Works v. Commissioner of Income‑tax, U. P. & 10 Accordingly, we grant leave to examine these questions. Security in the sum of Rs. 1,000, in each of the petitions. The appeals will be made ready on the present record with liberty to the ‑ parties to file additional documents and will be beard together.
Leave granted.
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