The Income Tax Ordinance, 1984

 

 

Section-160 Read with The Income Tax Act, 1922, Section-23(3)

The appellant was assessed under Section 23(3) of the Income Tax Act, 1922 for the accounting year ended on 30 June, 1981 and the assessment year 1981-82. The Deputy Commissioner of Taxes, while making the said assessment treated a sum of Tk 8,15,79,411.00 as a windfall profit in the hands of the assessee appellant and added the same to its total income—Held: We are of the view that having regard to ‘the principles enunciated by the Judicial Committee in the case of Raja Bijoy Singh Dudhuria (supra) and the Indian Supreme Court in the case of CIT Vs Sitaldas Tirathdas (and followed by the Kerala High Court (supra) with which we are in agreement, there can be no hesitation in holding in the facts of the case before us that the price differential or the windfall profit having been credited in favour of the BPC under a Govt. decision before it became an income in the hands of the appellant, The principle of diversion of income by overriding title is fully attracted. The disputed amount never reached the appellant as its income. The obligation of the appellant was not to be discharged out of its own income but the amount was to be treated at its origin as income to the credit of the BPC. [Para-23]

Meghna Petroleurm Ltd. Vs Commissioner of Taxes 6 BLT (AD)-95

Section-160(1) Read with Income Tax Act, 1922, Section-42(3)

(a) The assessee company submitted its return of income for the assessment year 1978-79 claiming allowable expenses under different heads such as Head Office Telephone and Telegram expenses, travelling expenses, fees for plan approval, engineering etc. expenses for essential coordinating service and area overhead charge. Deputy Commissioner of Taxes disallowed the claim against which the company preferred an appeal before the Appellate Joint Commissioner of Taxes, who affirmed the disallowance made by the Deputy Commissioner of Taxes on the ground that the assessee company having earned income in Bangladesh was not entitled to deduct there heads. The company, thereafter, preferred appeal before the Taxes Appellate Tribunal, Ctg. who while taking decision fell in the line the findings of the authority below.

On reference it has been found that expenses was not capital expenditure nor that they were personal or incidental to the business of the assessee. Business of the assessee company was unlike, ordinary business of a business house. In the instant case the expenditure incurred and reflected in the books of account maintained in the Head office at New York were incidental to carrying out of the business in Bangladesh. The assessee-company could not do the business in isolation in Bangladesh without receiving any effective advise and co-ordination from the Headoffice technical know-how. Tribunal did not advert its attention of the nature of the business activity of the company.

Merely because the assessee has been declared a company under section 2 (5A) of the Act and is a unit of assessment it should not be considered that the expenses in question do not merit deduction in computing the total income of the assessee. [Para-4]

(b) The account maintained in the Head office reflected the true statement of income and expenditure and the debit-note is a reliable basis for claiming deduction in computing total income of the assessee as the assessee maintains mercantile system of accounting. [Para-5]

American Bureau of Shipping Chittagong Vs Commissioner of Taxes 2 BLT (HCD)-173.

The Income Tax Ordinance, 1984

The Income Tax Ordinance, 1984 [XXXVI of 1984]

Section 6

Provision
of section 6 of the Income Tax Ordinance, 1984 is mandatory. The Deputy
Commissioner of Taxes upon receipt of the information as to particulars of the
persons concerned should have investigated the matter through proper channel by
issuing notices upon the remitters following the provision of Section 6 of the
Income Tax Ordinance, 1984 but without complying with the requirement of
Section 6 of the Ordinance, issuance of notices upon the remitters cannot be
treated as in accordance with law. The Deputy Commissioner of Taxes without
conducting any inquiry added the remittance quoting a wrong amount in the
account of the assesses applicant which proves that the authority did not
inquire the matter in accordance with law and the entire process was arbitrary
and on surmise—the decision of the Tribunal appears to have been passed without
applying proper judicial mind.

And Chandra Paul Vs
The Commissioner of Taxes 13 BLT (HCD)573

Section-93

Re opening the
assessment earlier accepted by the authority.

The
provision in section 93 of the Income Tax J Ordinance is that when in
finalizing the assessment certain fact or facts is/are escaped notice of the
authority or in other words income which ought to have been disclosed by the
assessee in his Income Tax return but he did not do so and that later on said nondisclosure
comes to the notice to the Income Tax Authority and that having had that fact
been before the Authority at the time of finalizing the assessment, the
assessment would have been otherwise, then in that situation to avoid loss of
revenue the provision of section 93 of the Income Tax Ordinance authorizes the
Income Tax authority to reopen the assessment which has been finalized earlier
and thereupon finalize the assessment taking into the consideration the new
facts.

Abdul Kader Master
Vs. Deputy Commissioner of Taxes & Ors 15 BLT (AD)271

Section-160

In
taxation matter reference is to be made out of final decision/judgment passed
by the Taxes Appellate Tribunal. Since in the instant case, the Appellate
Tribunal rejected the appeal on the ground of limitation and the reference
having not been made on point of limitation, the High Court Division rightly
refused to answer the question raised.

Mrs. Rani Bilkis
Banu Chowdhury Vs. The Commissioner of Taxes 15 BLT (AD)84

Section-160 Read with The Income Tax Act, 1922
Section-23(3)

The
appellant was assessed under Section 23(3) of the Income Tax Act, 1922 for the
accounting year ended on 30 June, 1981 and the assessment year 1981-82’. The
Deputy Commissioner of Taxes, while making the said assessment treated a sum of
Tk 8,15,79,411.00 as a windfall profit in the hands of the assessee-appellant
and added the same to its total income—Held: We are of the view that having
regard to the principles enunciated by the Judicial Committee in the case of
Raja Bejoy Singh Dudhuria (supra) and the Indian Supreme Court in the case of
CIT Vs Sitaldas Tirathdas (and followed by the Kerala High Court (supra) with
which we are in agreement, there can be no hesitation in holding in the facts
of the case before us that the price differential or the windfall profit having
been credited in favour of the BPC under a Govt. decision before it became an
income in the hands of the appellant, the principle of diversion of income by
overriding title is fully attracted. The disputed amount never reached the
appellant as its income. The obligation of the appellant was not to be
discharged out of its own income but the amount was to be treated at its origin
as income to the credit of the BPC.

Meghna Petroleum
Ltd. Vs Commissioner of Taxes 6BLT (AD)-95

Section-160(1) Read with Income Tax Act, 1922
Section-42(3)

(a) The
assessee company submitted its return of income for the assessment year 1978-79
claiming allowable expenses under different heads such as Head Office Telephone
and Telegram expenses, travelling expenses, fees for plan approval, engineering
etc. expenses for essential coordinating service and area overhead charge.
Deputy Commissioner of Taxes disallowed the claim against which the company
preferred an appeal before the Appellate Joint Commissioner of Taxes, who
affirmed the disallowance made by the Deputy Commissioner of Taxes on the
ground that the assessee company having earned income in Bangladesh was not
entitled to deduct their heads. The company, thereafter, preferred appeal before
the Taxes Appellate Tribunal, Ctg. who while taking decision fell in the line
the findings of the authority below. On reference it has been found that
expenses was not capital expenditure nor that they were personal or incidental
to the business of the assessee. Business of the assessee company was unlike,
ordinary business of a business house. In the instant case the expenditure
incurred and reflected in the books of account maintained in the Head office at
New York were incidental to carrying out of the business in Bangladesh. The
assessee-company could not do the business in isolation in Bangladesh without
receiving any effective advise and coordination from the Head office technical
know-how. Tribunal did not advert its attention of the nature of the business
activity of the company. Merely because the assessee has been declared a
company under section 2 (5A) of the Act and is a unit of assessment it should
not be considered that the expenses in question do not merit deduction in
computing the total income of the assessee.

American Bureau of
Shipping Chittagong Vs Commissioner of Taxes 2BLT (HCD)-173

(b) The
account maintained in the Head office reflected the true statement of income
and expenditure and the debit-note is a reliable basis for claiming deduction
in computing total income of the assessee as the assessee maintains mercantile
system of accounting.

American Bureau of
Shipping Chittagong Vs Commissioner of Taxes 2BLT (HCD)-173

Section-173 read with Section —3

Whether the
Commissioner of Taxes being not a party before the Tribunal had locus Standi to
file the application under section 173 of the Income Tax Ordinance

The
Appellate Tribunal may amend any order passed by it to correct any error
apparent from the record either of its own motion or the matter being brought
to its notice by any other Income Tax Authority —Commissioner of Taxes is
included as one of the income tax authorities and as such we are of the view
that the matter has been brought to the notice of the Tribunal by an authorised
authority and as such there is no error in this regard.

Mr. Akbar Hussain
Vs. Taxes Appellate Tribunal & Ors 15 BLT (AD)273

Income Tax Ordinance, 1994 Section-165 and 166
read with Emergency Power Rules, 2007 Rule-15

Held: we
are of the view that failure to initiate proceeding for assessment or the
pendency of the assessment proceeding cannot operate as a bar to the
institution of any criminal prosecution for offences punishable under Chapter
XXI of the Ordinance.

Govt. of Bangladesh
& Ors Vs. Iqbal Hasan Mahmood 16 BLT (AD) 313.