Income From Business Chapter- 09
(e) Penalty levied u/s 108 of the Income Tax Ordinance, 1979 for failure to file statement u/s 139.
Q.5 Autumn 2002 Dreamland (Pvt) Ltd. has requested you to advice as regards the important aspects of
law for disallowance of expenses incurred in cash [u/s 24ff] and excess perquisites[u/s 24(i)]. Please write
an advisory letter in this regard explaining the law with suitable examples.
Q.2 Autumn 2001 Discuss briefly the legal position with respect to the admissibility or otherwise of the
following as business expenditure under the Income Tax Ordinance, 1979:
(a) Amount paid as income tax.
(b) Capital expenditure incurred on scientific research in Pakistan.
(c) Share of profit paid to a bank under a scheme of musharika.
(d) Interest paid by a firm to a partner of the firm.
(e) Salary paid otherwise through a crossed bank cheque etc. not exceeding Rs. 5,000..
Q. NO. 4 March 2000 Enumerate 12 in-admissible deductions fort computing income from business or
profession contained in section 21 of the Income Tax Ordinance.
Q. NO. 3 March 1999 Mr. B is MD of a public company. He is master of science in petroleum engineering
with a little background of accounting and tax. He has been informed that the assessing officer may
question the method of accounting of the company in the context of determination of business income.
Whilst section 20 of the Income Tax Ordinance specifies admissible deductions, section 21 of the
Ordinance stipulate certain deductions which are not admissible under the law.
MD is not clear about certain things stated above and has asked you, as chief accountant of explain him
the following in a write up:
(a) What types of income are chargeable under the head business income?
(b) What are the six inadmissible deductions u/s 21 of the ordinance for computing business income.
How many types of method of accounting exist and under what circumstances assessing officer may not
accept the tax payer’s method of accounting.
Q. NO. 2 Nov 1996 Which income shall be chargeable under the head income from business and what
deductions are admissible while computing such income?
Q. NO. 4 Nov 1996 Answer the following statements, considering the keys given therein:
I) Income from business or profession is computed u/s: (a) 19 (b) 18 (c) 22
Q. NO. 9 May 1994 Which of the following appear to be correct in the given choices?
i) Rental income earned by a taxpayer engaged in the business of letting out shops in a large shopping
plaza is taxed as:
(a) Income from business or professions(b) Property income(c) Income from other sources(d) Capital gainsii) The profit on sale of building used for the purposes of taxpayers business is taxed as:
(a) Capital gains (b) Business income(c) Exempt from tax (d) Taxed at reduced rate