Ground No.3 The learned AR argued that the learned DCIR had duly accepted thesection 156 of the Ordinance was intended to be applied. However, for the account head - Sales Promotion Others, the learned DCIR observed that it also include expenses relating to free gifts given to doctor, free travel, boarding and lodging to doctors within and outside the country visits. Accordingly, he made an opinion that these perquisites to doctors are given by pharmaceutical industries as prizes for sales promotion. Therefore, these visits grants to doctors fall under the definition of “prize for sales promotion” on which the appellant was required to withhold tax under section 156 of the Ordinance at the rate of 20% on prize for sales promotion. The learned AR submitted that this head of expense “sales promotion - others” includes expenses related to seminars of doctors, cycle meetings and other promotional activities which includes refreshments, hotel charges, airfare, conveyance etc. That none of these expenses would fall in the nature of “prize offered for promotion of sales”. The learned AR referred to the reported decision of the Hon’ble Sindh High Court, 2012 PTD 4054 wherein the Hon’ble Judges of the High Court, while interpreting the scope of provision of withholding of tax u/s 156 of the Ordinance held that the term “prize” did not merely referred to meaning by chance but it also included regular payment either in cash or in kind to distributor on their achieving sales target. The learned AR further submitted that the appellant has not paid any reward through contest or by change. Neither the applicant made any payment to distributor in the form of free units on achieving sales target. Therefore, the action of the learned DCIR in holding that the provision of section 156 of the Ordinance is applicable in the case of the appellant is arbitrary and misconceived and not supported by the above decision of the Hon‘ble High Court of Sindh. 5.1 The learned AR further submitted that unless it is established that (a) is liable to taxpayer is a withholding agent (b) a particular )deduction/withholding and (c) that a specified tax of a specific person was to be withheld who could take credit of the tax recoverable u/s 168 of the Ordinance. That such proceeding for recovery of non-withheld tax cannot be made. He added that the legal requirements were ignored and brushed aside by the learned DCIR therefore, proceedings were ab-initio illegal and unlawful. The learned AR also drew attention to the decisions 2012 PTD (Trib.) 122 and 2014 PTD (Trib.) 1542 of the learned Tribunal whereby it was held that “without identifying names and addresses of the parties or persons from whom and how much tax was to be deducted, provisions of section 161 of the Ordinance could not be invoked. 5.2. On the other hand the contention of the learned officer as per impugned order was also considered and for ready reference the same is reproduced here as under:~ Details for Advertising, Samples and Sales Promotion expenses along with invoice wise breakups and taxes withheld. In this regard, the AR had argued that the Company has properly withheld tax wherever applicable and that it has duly deducted tax at source at the time of payment. After detailed discussion with AR, we have accepted the contention of the AR and confirm that the Company has properly withheld tax wherever applicable. Under the head Sales Promotion ~ Others, the Company has made certain payments Ch) involve target based payments. These transactions are triggering the section 156 and 161 of the Ordinance. 5.3 According to the learned AR above conclusion of the learned DCIR is incorrect and shows the misunderstanding and misinterpretation of section 156 of the ordinance. That section 156 of the Ordi Temeiced withholdingtax from “prize offered by company on promotion of sales” and not on “sales promotion expenses”. That the learned DCIR during the proceedings including in the show cause notice and the impugned order did not establish as to how he thinks that the appellant's sales promotion expenses were in the nature of “prize”. 5.4 Besides the learned AR has also deliberated on the term “prize” vi viz case law of Honorable High Court relied upon by the learned officer in case of Wazir Ali Industries reported as 2012 PTD 405 to arrive at the conclusion that provision of section of 156 in case of appellant is not e- applicable on payments made under the heads seminar, cycle meeting and other promotional activities details of which were claimed to have been provided. 5.5 The contentions of both sides have been considered. In view of the clear findings of the Hon‘ble High Court, in the case of Wazir Ali Industries (Pvt.) Ltd reported as 2012 PTD 4054 and relied upon by the learned AR. I am of the firm opinion that the ratio decided therein is not squarely applicable to the facts of the applicant case. In the present appeal no free units were distributed on completion of some targets fixed for achievement. Rather, subject expenses were made on seminars, cycle meeting and other promotional activities. Hence provisions of section 156 of the ordinance are not clearly attracted in the instant case and thus the appellant was not required to deduct tax @20% on such payments. It is evident from the impugned order that the learned officer failed to give any plausible reason or justification to substantiate his stance which is totally based on assumption. The aforementioned expenditures cannot be termed as prize offered for salesand the alleged direct benefit of doctors to show that doctors were rewarded on achievement of any sort of target of doctors who won the alleged benefit by chance. Doctors attending seminars did not gain any such benefit. No deliberation was made and no reason was assigned by the learned officer for his action of treating above expenditure under section 156. 5.6 In view of above, the impugned charge of tax u/s.161 amounting to HR, 2°: cefauit surcharge levied thereof is directed to be deleted and the impugned order is annulled on this issue. The appeal is disposed-off as indicated above. ao (SAJJAD AKBAR KHAN) COMMISSIONER INLAND REVENUE (APPI 1) KARACHI Copy to: aN 1, Dy, serall 1. The Cl +] 2 The he vA (SAJJAD AKBAR KHAN) COMMISSIONER INLAND REVENUE (APPEALS-I) KARACHI