Depreciation allowance

Deprecation allowance allowed for buildings was 5% [Entry I of Third Sched. to the Income Tax Ordinance, 1979], whereas for "factory" or "workshop" it was 10% [Entry II of Third Sched. to the Income Tax Ordinance, 1979]

Question was whether a hospital could be considered as a "factory" or "workshop", entitling it to 10% depreciation allowance

Hospital whilst being an enclosed structure was undoubtedly a building, however, by no stretch of imagination could it be considered to fall within the definition of a "factory" or "workshop" as it was not a building where goods were manufactured, repaired or assembled

Hospital was, thus, only entitled to depreciation allowance at the general rate of 5% instead of 10%

Petition for leave to appeal was dismissed accordingly.

Deprecation allowance allowed for buildings was 5% [Entry I of Third Sched. to the Income Tax Ordinance, 1979], whereas for "factory" or "workshop" it was 10% [Entry II of Third Sched. to the Income Tax Ordinance, 1979]

Question was whether a hospital could be considered as a "factory" or "workshop", entitling it to 10% depreciation allowance

Hospital whilst being an enclosed structure was undoubtedly a building, however, by no stretch of imagination could it be considered to fall within the definition of a "factory" or "workshop" as it was not a building where goods were manufactured, repaired or assembled

Hospital was, thus, only entitled to depreciation allowance at the general rate of 5% instead of 10%

Petition for leave to appeal was dismissed accordingly.

Whether the term 'industrial undertaking' as used in Rr. 5A, 5B & 5C of the Third Schedule to the Income Tax Ordinance, 1979 included an Association of Persons (AOP)

Rule 5B of the Third Schedule to the Income Tax Ordinance, 1979 was applicable to industrial undertakings; R. 5C of the Schedule, applied to only those industrial undertakings as referred to in R. 5A

Rule 5A of the Schedule was applicable only to the industrial undertakings owned and managed by a company

Association of Persons(AOP) being not a limited company, therefore, it was not entitled to the benefit of R.5C of the Third Schedule of Income Tax Ordinance, 1979.