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NISHAT CHUNIAN LTD. vs COMMISSIONER INLAND REVENUE, LTU, LAHORE S — 2025 PTD 1448 INLAND REVENUE APPELLATE TRIBUNAL OF PAKISTAN

Case information

Citation
2025 PTD 1448 INLAND REVENUE APPELLATE TRIBUNAL OF PAKISTAN
Year
2025
Reporter
PTD
Parties
NISHAT CHUNIAN LTD. vs COMMISSIONER INLAND REVENUE, LTU, LAHORE S
Subject matter
Tax & Customs
Provisions referred to
S. 34; Income Tax Ordinance

Fields are extracted from the reported citation and judgment text. Where a detail is not stated in the record, it is not shown.

Judgment text as reported

NISHAT CHUNIAN LTD. VS COMMISSIONER INLAND REVENUE, LTU, LAHORE S. 34(3)---accrual-basis accounting---Scope and effect---Officer Inland Revenue (OIR) disallowed provisional expense being inadmissible as provisions of other benefits and compensated absences and provident funds contributions has been claimed and was included in under the head of salaries---Department filed appeal as the Commissioner Inland Revenue (appeals) ('the Commissioner-appeals') deleted the impugned addition---Held, that the Commissioner-appeals rightly observed that in mercantile system of accounting expenses are to be allowed when it become payable and have been determined with reasonable accuracy---It is a general practice that liability regarding leave encashment, an unavailed leave is calculated at the end of the year and then paid in subsequent year---Record revealed that the addition was made by the OIR without bringing on record any material within terms of S. 34(3) of the Income Tax Ordinance, 2001 ('the Ordinance 2001')---Under provision of S. 34(3) of the Ordinance 2001, an amount shall be payable by a person when all the events that determine liability have occurred and the amount of liability can be determined with reasonable accuracy---Similarly, contribution to recognized provident fund is an admissible expense---Thus, impugned addition was rightly deleted---No case of interference by the Tribunal was made out---appeal filed by Department was dismissed.

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