Law: Income Tax Ordinance, 2001

Section: 4C, 37(3A), 2(29), 120(1)(b), 2(63), 137,

Summary

This order addresses an appeal by a taxpayer (a private limited company) against the imposition of super tax under section 4C of the Income Tax Ordinance, 2001 for Tax Year 2022. The taxpayer sold an immovable property held for more than four years, declared a business loss, and reported a capital gain of Rs. 260,381,924, which, according to the law, was not chargeable to tax due to the holding period. The tax authorities, however, levied super tax on this capital gain. The Tribunal found in favor of the taxpayer, holding that when the gain is computed as zero under section 37(3A) (because the property was held for more than four years), no super tax can be charged on that gain under section 4C. The appeal was allowed, and the super tax demand was deleted.

Core Points

The taxpayer declared a business loss and reported a capital gain from the sale of immovable property held for over four years.