The expense in dispute while computing business income–
The expense in dispute neither falls under Section 23(xviii) of the 1979 Ordinance nor any other category of allowances or deductibles listed in rest of the provisions of Section 23, so as to justify its deduction while computing respondent’s income. The High Court of Sindh allowed its adjustment simply on the ground that sports and social activities boost mental and physical health of a person by answering the question of law in the affirmative. This may be so but that ipso facto cannot be regarded as a type of allowance that can be directly co-related to any category of allowances and deductibles listed in Section 23 of the 1979 Ordinance with the business activity of the respondent, which is rendering of operational and maintenance services to a power generating company. The conclusion of the High Court being totally misconceived and not based on any provision of Section 23 is not sustainable in law. The expenditure in question, therefore, cannot be taken into consideration while computing business income of the respondent. .....Commissioner of Income Tax =VS= International Power Global Developments Limited, (Civil), 2018 (1) [4 LM (SC) 128] ....View Full Judgment

Amended assessment–
SNGPL and OGRA are bodies that are competent to divulge such information with absolute correctness as one is the supplier of natural gas and the other fixes the retail price of CNG in the country. To the information so procured, which on the face of it fall within the ambit of ‘definite information’, the tax authorities applied OGRA’s conversion formula to ascertain the quantum of CNG produced from the natural gas consumed in each of the tax years in question. It then transpired that the sale of CNG has been under-reported, which led to issuance of amended assessment order. We find no legal infirmity in the manner in which the tax authorities ascertained the quantum of CNG produced from the volume of natural gas consumed in the process of conversion. Allow these appeals, set-aside the impugned judgment passed in all connected cases and restore the amended assessment orders issued to the respondents. .....Commissioner Inland Revenue =VS= M/s Khan CNG Filling Station, (Civil), 2017 (2)– [3 LM (SC) 86] ....View Full Judgment

The interest income on the investment made in the National Funds Bonds was exempt from tax under Clause 170 to the Second Schedule to the Part I of the Income Tax Ordinance. The appellant’s counsel failed to point out that there was any restriction under the law that would have disentitled the respondent from claiming exemption on the interest income in case there were loans standing against it. .....Commissioner of Income Tax =VS= Pak Saudi Fertilizer Ltd, (Civil), 2018 (2) [5 LM (SC) 187] ....View Full Judgment