Syed AKHTAR AHSAN through Legal heir vs INCOME TAX OFFICER, CIRCLE 05, ZONE-B, LAHORE and 4 others
This matter involves two Tax References (P.T.Rs. Nos. 2 and 3 of 1994) arising from an order of the Income Tax Tribunal, Lahore, concerning the admissibility of interest expenses claimed by the petitioner against income derived from property, dividends, and interest. The petitioner sought to deduct interest payments made on loans obtained from the Bank of America and the National Bank of Pakistan, asserting that these loans were invested in company shares. The Revenue contended that the petitioner failed to establish a nexus between the loans obtained and the interest expenses claimed. The Assessing Officer, the Income Tax Commissioner, and the Income Tax Tribunal concurrently found that no such nexus existed. The Lahore High Court held that the determination of whether a nexus exists between a loan and claimed interest expenses is a question of fact. Since all lower forums had recorded concurrent findings of fact against the petitioner, the Court declined to interfere with these findings, concluding that no question of law arose for adjudication.
- Is the determination of a nexus between a loan and claimed interest expenses a question of fact or a question of law?
- Can the High Court interfere with concurrent findings of fact recorded by income tax authorities?
ORDER
P.T.Rs. Nos. 2 and 3 of 1994 arise out of an order passed by the Income Tax Tribunal, Lahore on 22- 12-1992, therefore, the same are being disposed of by a single order.
2. The petitioner derived income from the property dividend and interest. The petitioner secured loan from Bank of America to the tune of Rs.2,21,000 on which interest was paid to the amount of Rs.23,785 and Rs.4,341 respectively for the assessment years 1979-80 and 1980-81. Loan from National Bank of Pakistan was secured to the extent of Rs.5,10,000 a sum of Rs.71,338 for the year, 1979-80 and a sum of Rs.75,278 for the year, 1980-81 was paid respectively as an interest expenses.
3. Learned counsel for the petitioner argued that the wealth statement furnished by him clearly indicates that loan obtained by him was invested in the share of the companies. Therefore, even if no income by way of dividend has accrued still he is entitled to the expenses.
4. On the other hand, learned counsel for the Revenue argued that all the forums on the income tax hierarchy found that the petitioner failed to prove any nexus between loan and the interest to entitle him to claim admissibility for expenses and it being a question of fact cannot be interfered.
5. We have considered the respective submissions of the learned counsel for the parties.
6. It is clear from the material placed on the record and by examining of the impugned judgment that the Assessing Officer, the Income Tax Commissioner ,d Income Tax Tribunal found no nexus between the loan and the interest to determine the admissibility of the petitioner's claim for expenses.' Undoubtedly, this is a question of fact on which concurrent findings have been recorded by all the forums below. We have not been able to persuade ourselves to take a different view. No question of law arises in our opinion.
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