Law: Constitution of Pakistan, 1973

Section: 77, 142, 25, 268, 279F

Law: Income Tax Ordinance, 2001

Section: 7, 7E

Law: Income Tax Act, 1922

Section: 2, 6, 12B

CONSTITUTION OF THE ISLAMIC REPUBLIC OF PAKISTAN, 1973 Article 7 The Constitution of Pakistan recognizes the power of taxation as basic characteristic of sovereignty, under its Article 7 with only condition that the state should be empowered by law to impose any tax or cess. Article 25 See Section 7E of the Income Tax Ordinance, 2001. Articles 77, 142Fourth Schedule Federal Legislative List Legislative competence upon Federation and the Provinces.The condition is reiterated in Article 77 as is reflected in its caption Tax to be levied by law only. Article 142 bestows legislative competence upon the Federation and the Provinces. The Federation has exclusive power to impose tax, through legislation, with respect to the kinds and nature of taxes mentioned in the Federal Legislative List [means Federal Legislative List in Fourth Schedule as defined in Article 70(4)] and the taxes not listed therein can only be imposed by the Provinces. Articles 77,142, 268, 279Fourth ScheduleFederal Legislative ListEntry 47, 50 Concepts of Capital Gain Tax, Capital Asset and property as components of Capital Asset.See Section 37 of the Income Tax Ordinance, 2001. Fourth Schedule-Federal Legislative ListEntry 47 To treat the market value of immovable property as income under Entry 47 is beyond the competence of Federal Legislature hence is declared ultra vires.See Section 7E of the Income Tax Ordinance,.2001. Fourth ScheduleFederal Legislative List Entry 50 The Entry 50 for taxing capital value of Assets requires that the assets should be valued as a whole and taxed inseparably. The provisions of Section 7E are read down to save that taxation on Capital value of Assets, which is with in competence of Federal legislature under Entry 50.See Section 7E of the Income Tax Ordinance, 2001. INCOME TAX ACT, 1922 Sections 2, 6, 12B Concepts of Capital Gain Tax, Capital Asset and property as components of Capital Asset.See Section 37 of the Income Tax Ordinance, 2001. INCOME TAX ORDINANCE, 1979 (XXXI OF 1979) Sections 2, 15, 27 Concepts of Capital Gain Tax, Capital Asset and property as components of Capital Asset.See Section 37 of the Income Tax Ordinance, 2001. INCOME TAX ORDINANCE, 2001…