SALEEM AKHTAR, J.-1. For the assessme nt year 1979-80 the respondent filed its return of income in the old form. By this time the Income Tax Ordinance, 1979 had been implemented but as new forms were not available the old form was used and Wealth Tax was not deducted as permitted by the Ordinance for computation of income. The assessing officer framed the assessment under sub- section (1) of section 59 and did not exclude the Wealth Tax liability. The respondent therefore filed an appeal before the Appellate Assistant Commissioner who in terms of clause (83) of the Second Schedule to the Income Tax Ordinance permitted the exclusion of the Wealth Tax liability as admissible deduction against income generating assets. The Department filed an appeal which was dismissed by the Tribunal. An application filed under section 136(1) for referring the following question was also dismissed as the question did not arise from the order of the Tribunal:- "Whether on the facts and in the circumstances of the case, the Wealth-tax liability is an allowable expenditure under sections 10 and 12 of the Income Tax-Act."
2. The Department has filed this application under section 136(2) of the Income Tax Ordinance raising the following question.
"Whether on the facts and in the circumstances of the case, the Wealth Tax liability is an allowable expenditure under section 23 or under section 31 of the Income Tax Ordinance of 1979."
3. This question seems to have been framed under I misunderstanding to the provisions of law. It may be mentioned that in the Income Tax Act under sections 10 and 12 Wealth Tax paid on any income yielding asset or property owned by the assessee or held for the purpose of his income, was deductible as expense in computing the assessee's income, profit or gain. Reference can be made to Commissioner of Income Tax v. Zakia Siddiqui 1989 PTD 135. When Income Tax Ordinance was promulgated the position completely changed under it. The Wealth Tax payable by an assessee allowable under Wealth Tax Act was to be deducted from the income as exemption had been granted under clause (83) of Schedule II of the Income Tax Ordinance. In this scheme of the Ordinance question of allowing the Wealth Tax as expenditure does not arise. Exemption from Income Tax and allowance as expenditure are two different concepts. There is no provision under the Income Tax Ordinance to permit the Wealth Tax payable by an assessee to be treated as an expenditure for carrying on the business. The question therefore, does not arise. We accordingly dismiss the application.