' AQEEL AHMED ABBASI, J.---Through instant reference application, the applicant department has proposed following questions, which according to learned counsel for the applicant, are questions of law arising from the order dated 06.11.2015 passed by the Appellate Tribunal, Inland Revenue (Pakistan), Karachi Bench, Karachi in I.T.A. No,979/KB of 2013 (Tax Year 2012):- "I . Whether under the facts and circumstances of the case, thelearned Tribunal was justified to delete the addition of Rs,4,0902,000 made under section 21(m) on account of payment of wages in cash when such an addition was made only on account of payments of more than Rs,15,000?
2. Whether under the facts and circumstances of the case, the learned Tribunal was justified to delete the addition of Rs,4,09,2000 made under section 21(m) on account of payment of wages in cash due to the reason that the addition made without pin pointing any specific instances where which had crossed such limits, when the burden to prove that such transactions were below the threshold limits wac upon the taxpayer?
3. Whether under the facts and circumstances of the case, the learned Tribunal was justified to delete the addition of Rs, 3,450,800 made under section 21(1) on account of freight expenses, when the taxpayer failed to substantiate with any evidence that the expenses were actually the freight charges and hence fell within exclusion clause?"
2. Learned counsel for the applicant has read out the impugned order as well as the order passed by the Authorities below and submits that the finding of the Appellate Tribunal is incorrect, therefore, the impugned order may be set-aside and the questions proposed by the application department may be answered in affirmative in favour of the applicant.
3. We have heard the learned counsel for the applicant, perused the record with the assistance of the learned counsel as well as the impugned order passed by the Appellate Tribunal and the orders by the Authorities below. From perusal of the questions proposed through instant reference application and the finding as recorded by the Appellate Tribunal in the instant case, it appears that the decision of the Appellate Tribunal is based on finding of facts, whereas, the Commissioner (Appeals) has also recorded detailed finding in this regard. It will be advantageous to reproduce the findings of the Appellate Tribunal as well as the Commissioner (Appeals-I), which reads as follows:-- Findings of Commissioner (Appeals-I): "2. The learned AR of the appellant has agitated on the disallowance of Salary and Wages amounting to Rs,4,092,000/-. In this regard the learned AR of the appellant has stated that Additional Commissioner has misconceived the factual position as the salary and wages to the extent of above additions were paid to the labour and worker, by cash and remained below monetary threshold of Rs, 15,000/- under section 21(m) besides the disallowance has been made without pin pointing any specific instance which had crossed the limits. The addition made under this head is arbitrary discriminating and unlawful. 1 have gone through the assessment order and have also considered the contentions of Teamed AR. In my considered opinion, the contention of the learned counsel for the appellant is correct as officer has not pointed out any specific instance which had crossed the limits under section 21(m), therefore the addition on this count is hereby deleted.
2. The learned AR of the appellant has agitated on the disallowance of Sales Promotion expenses Rs,2,500,800/-. In respect of Sales Promotion Expenses the learned AR of the appellant has stated that these were incurred as incentive for achievement of sales/targets and amount was credited to the accounts of dealers as well as for given items under buy two and get one free scheme. The provision of section 21(1) are therefore not applicable. On the other hand the officer in his impugned order discussed that the appellant had settled the payment through book entries which were tantamount as payment through cash and hence hit by inadmissible provision under section 21(1) of Income Tax Ordinance, 2001. I have no doubt in my mind that entries in the books of accounts of two entries representing genuine transaction and a receipt of money in the form in which Money is received between business is an income of one entry and expenditure of other entity. Reliance is placed on reported decision 1955 SSC 1 in the case of Rmkula Sugar Mills. Since expense was incurred not through banking channel therefore the plea of the learned AR is not sustainable conversely the action of the officer is confirmed.
' Finding of Appellate Tribunal: "7. We have heard the arguments of above two parties carefully and our findings are as under:--
(i) Regarding the additions made by ACIR under section 21(m) and deleted by CIR(A), it is rightly observed by him that these disallowances have been made without pin pointing any specific example of salaries/wages paid in cash above the threshold of Rs,15,000/- per month to an individual. The Assessing Officer while adding this amount has a remarked that disallowances are made on the basis of substantiation also. As such, it appears that he was not sure, whether he is adding/disallowing the claim of salaries/wages on the basis of amount paid in above the threshold as provided in section 21(m) or being unsubstantiated/ not supported by authentic documentary evidence.
' In the light of above discussion, the disallowances made by the ACIR are not maintainable as has been observed by CIR(A) also. Hence the order of the CIR(A) is upheld and departmental appeals fails.
(ii) Regarding another disallowance of freight charges made by the ACIR under section 21(1), the CIR(A) has observed that condition of expenditure payment exceeding Rs,50, 000/- through crossed cheque drawn on a bank or by crossed bank draft or crossed pay order or any other crossed banking instrument showing transfer of amount from the business bank account of the taxpayer does not apply to "freight charges" vide proviso b(ii) to clause 21(1).
' It is further observed that ACIR while making disallowance under this head has clearly mentioned that the disallowance is from the claim of "freight charges" and under section 21(1) but could not take care of proviso b(ii) to clause 21(1) regarding exclusion from the provision provided in the statute as has rightly been pointed out by CIR(A) and adjudicated accordingly.
' The Departmental Representative could not rebut the above position. Hence, deletion of disallowance made by CIR(A) from the freight charges is also upheld.
' The Departmental appeal fails on both grounds."
4. From perusal of hereinabove concurrent findings as recorded by two appellate forums in the instant case, it has emerged that the disallowances made by the Assessing Officer, while invoking provisions of Section 21(m) of the Income Tax Ordinance, 2001, were misconceived in facts and law, as neither the Assessing Officer has given any reason to justify the disallowances made in terms of Section 21(m) nor the respondent was ever confronted with such amount, which according to Assessing Officer, was paid above the threshold of Rs,15000/- towards salary wages during the relevant financial year. Similarly while disallowing expenditure under section 21(L), the Assessing Officer failed to appreciate that the freight charges could not be disallowed in view of proviso b(ii) to the Clause 21(i) of the Income Tax Ordinance, 2001
5. In view of hereinabove facts and circumstances of the case, we are of the opinion that the impugned order passed by the Appellate Tribunal Inland Revenue in the instant case, does not suffer from any factual and legal error, hence requires no interference by this Court. Moreover, the decision is based on concurrent finding on facts, which otherwise does not suffer from any perversity or legal infirmity, hence, cannot be altered by this Court in its reference jurisdiction under section 133 of the Income Tax Ordinance, 2001. We may further observe that under reference jurisdiction, only substantial legal question can be examined, which may arise from the impugned order passed by the Appellate Tribunal, whereas, the questions, which do not require any interpretation of any provision of law, rule or regulation, or its application on the undisputed facts of a case, otherwise, do not constitute a question of law to be decided by this Court under its reference jurisdiction. Reliance in this regard can be placed in the case of Collector of Customs, Port Muhammad Bin Qasim, Karachi v. Messrs Kaghan Ghee Mills (Pvt.) Ltd. (2008 SCMR 1538), Collector of Customs and another v. Messrs Fatima Enterprises Ltd and others (2012 SCMR 416), Messrs Gold Trade Impex and another v. Appellate Tribunal of Customs, Excise and Sales Tax and 2 others (2012 PTD 377) and Collector of Customs v. Messrs Qasim International Container Terminal (Pak.) Ltd. (2013 PTD 392).
' Accordingly, instant reference application being misconceived and devoid of any merits, is hereby dismissed in limine along with listed application.