auditors' report to the shareholders of islami bank bangladesh limited

income
(ii) Provision made on other
income
96,357,945 108,609,069
1,797,128,955 1,598,732,375
Less: Tax Paid during the year 2,007,639,120 1,081,559,857
Closing balance 1,013,638,257 1,224,148,422
Provision for Tax for the year ended on 31.12.2007 has been made as per prevailing rates applicable on the
net Profit and without considering income tax on Provision made against bad and doubtful investments and
Off-balance sheet items, and other add backs, (if any). Income tax has not been considered on the provision
made against bad & doubtful investments and Off- Balance Sheet Items during the year 2007 with positive
hope based on persuasion made with the government that it will be exempted from tax. Estimated Tax on
such provision and the amount involved in the Reference Applications / Appeals have been shown as
Contingent Liabilities as at December 31, 2007 Income Tax Assessment has been completed at the
Deputy Commissioner level as well as Income Tax Tribunal level up to the Accounting year 2004.
Income Tax Assessment for the Accounting year 2005 has been completed at the
Commissioner (Appeals) level and assessment for the accounting year 2006 is lying with the Deputy
Commissioner of Taxes level. Reference Applications/ Appeals have been filed with the High
Court/Supreme Court for the Accounting years 1990, 1995, 1996, 1997, 1998, 1999, 2000, 2001, 2002,
2003 & 2004 on Zakat and other issues. Review of appeal filed against judgment of appellate Division of
the Supreme Court for disallowance of Zakat for the years of 1990, 1995 & 1996disallowance of Zakat for
the years of 1990, 1995 & 1996.
Amount in Taka
as at December 31,
2007 2006
19.4.2 Deferred Tax Liability
Opening balance 81,459,677 63,509,570
Add: Provision made during the
31,000,000 17,950,107
year
Closing balance 112,459,677 81,459,677
Provision for Deferred Tax has been made on all temporary differences between the Tax base and the
carrying amounts for financial reporting purpose as per Bangladesh Accounting Standard 12. Tax base
represents the written down value of Assets with adjustment used for tax purpose. Tax rate prevailing at the
Balance Sheet date is used to determine Deferred Tax.
19.5
Profit/ Rent/ Compensation Suspense
Account