Law: Income Tax Ordinance, 2001

Section: 18,79,79(1),79(1)(e),122(4),122(5A),133, 166(1)(a)

Income Tax Ordinance (XLIX of 2001)----Ss.18, 79(1)(e), 122(4)(5A), 133, 166(1)(a)--Reference-- Tax exemption--Adventure in nature of trade--Scope--Taxpayer was an industrial unit and sold its land by converting it into a housing scheme and earned profit--Validity--For an adventure in nature of trade there had to be “indicia of trade” which was present in transaction in question--Intention of a person in selling out any asset depended upon the conduct of that person and the circumstances of the case-- Manner and method in which land was sold out fell under adventure in the nature of trade and was taxable in the hands of company and was not exempted under S.79 of Income Tux Ordinance, 2001, as claimed by the tax payer--Earlier proceedings on same subject under S.122(5) of Income Tax Ordinance, 2001, which were dropped, in those proceedings procedure through which the issue was probed during audit proceedings was not carried out by the department--Such was neither a case of change of opinion nor it was a past and closed transaction--All three authorities below i.e. Taxation Officer, Commissioner Appeals and Appellate Tribunal Inland Revenue were justified in reaching to the conclusion that exemption claimed by taxpayer under S.79(1)(e) of Income Tax Ordinance, 2001, was not applicable--Reference was dismissed, in circumstances. Fecto Cement Limited v. Additional Commissioner Inland Revenue C.P. No.D-2595/2015 and Messrs Julian Hoshang Dinshaw Trust and others v. Income Tax Officer and others 1992 SCMR 250 distinguished. Fancy Foundation v. Commissioner of Income Tax, Karachi 2017 SCMR 1395 and Load Sands in IR v. Livingstone 11 TC 538 rel. JUDGMENT: IRFAN SAADAT KHAN, JUSTICE:---.--- The instant ITRA was filed against the order passed by the Appellate Tribunal Inland Revenue (ATIR) in ITA No.1042/KB-2016 dated 16.4.2018 by raising a number of questions of law. However vide order dated 22.5.2018 only the following questions of law were admitted for regular hearing. i) Whether on the facts and circumstances of the case, the learned Appellate Tribunal Inland Revenue was justified in holding that there was no claim under Section 79(1)(e) of the Income Tax Ordinance,…

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