2001 PLP (Trib (PTD)

(a) any salary due to the assessee from an employer in the income year, whether paid or not; and (b) any salary (including arrears (or advances) of salary) paid to the assessee in the income year by an employer. (2) For the purposes of subsection (1),

(a) 'Salary' includes-- (i) any wages; (ii) any annuity, pension or gratuity; (iii) any fees, commissions, allowances, perquisites or profits in lieu of, or in addition to, salary or wages;"

13. The next two heads of income enumerated under section 15 are (b) "interest on securities" and (c) "income from house property" which obviously are not relevant to our pursuit.

14. The next head is (d) "income from business or profession" chargeable under section 22 of the Ordinance the provisions whereof are reproduced hereunder: "

22. Income from business or profession.

The following incomes shall be chargeable under the head 'Income from business or provision', namely:,--. (a) profits and gains of any business or profession carried on or deemed to be carried on, by the assessee at any time during the income year; (b) income derived by any trade, professional and similar association from specific services performed for its members; and (c) value of any benefit or perquisites whether convertible into money or not, arising from business or the exercise of a profession. Explanation.

Where speculative transactions carried on by an assessee are of such a nature as to constitute a business, the business (hereinafter referred to as 'speculation business') shall be deemed to be distinct and separate from any other business carried on by the assessee."

15. The next head of income under section 15 is (e) "Capital gains" which too is not relevant in the present context. The sixth and the last head under which an income may be classified is, (t) "income from other sources" which is chargeable under section

30. We, therefore, shall reproduce the provision of section 30, as well, hereunder: "

30. Income from other sources.

(1) Income of every kind which' may be included in the total income of an assessee under this Ordinance shall be chargeable under the head 'Income from other sources', if it is not included in his total income under any other head. (2) In particular, and without prejudice to the generality of the provisions of subsection (1), the following incomes shall, save as otherwise provided in this Ordinance, be chargeable under the head 'Income from other sources', namely:

(a) dividend; (b) interest, royalties and fees for technical services; (c) ground rent; (d) income from the hire of machinery, plant or furniture belonging to the assessee and also of buildings belonging to him if the letting of the buildings is inseparable from the letting of the said machinery, plant or furniture; and (e) any income to which subsection (12) of section .12 or section 13 applies. "

16. It transpires on perusal of the provisions of sections 16, 22 and 30 supra that the term "commission", as such, has been used only in sub clause (iii) of clause (a) of subsection (16) (supra). On a more careful perusal of the sub-clause (iii) (supra) it further transpires that the term 'salary' includes any fees, commission, allowances, perquisites or even profits if these are in lieu of, or in addition to, salary or wages. However, in the context of salary income under section 16 the condition precedent to the classification of income under this head is that the payer and the payee have the relationship of the "employer" and "the employee". The appellant in the instant case who has received commission in addition to the salary is an employee of the payer of the commission as well as the salary.

17. The provisions of section 22 are not applicable to appellant's case because he himself has not claimed that he is engaged in any business or profession.

18. This bring us to the claim of the appellant that the commission received by him is "income from other sources"; hence chargeable under section 30 of the Ordinance. Subsection (1) of section 30 provides at the' outset that income of every kind which may be included in the total income of the assessee under the Ordinance shall be chargeable under the head "income from other sources" if it is not included in his total income under any other head"_ (Emphasis provided by us). Subsection (2) of section 30 thereafter specifies five specific incomes in particular and without prejudice to the generality of the provisions of subsection (1) which shall be chargeable under section 30, save as otherwise provided under the Ordinance. (Emphasis provided by us). Commission income is not one of the five specific incomes while it is included in appellant's total income under the head 'salary' by virtue of provisions of sub-clause (iii) of clause (a) of subsection (2) of section 16 of the Income Tax Ordinance, 1979. We, therefore, find no substance in the contention of the appellant that the commission received by him from his employer in addition to his salary is not salary income but "income from other sources" and expenditure laid out or expended wholly and exclusively for earning such income is to be allowed or deducted in computing such income in accordance with the provision of section 31(l)(b) of the Ordinance. Since there is no provision under section 16 to allow any deduction on account of any expenditure incurred to earn the commission from the employer by the employee, the learned C.I.T.(A) is not justified in directing to allow the expenditure claimed by the appellant.

19. Accordingly, the impugned order of the learned C.I.T.(A) isle vacated and the assessment order is restored. 20 The appeal is allowed. C.M.A./M.A.K./68/Tax(Trib.) Appeal allowed.