| Citation(s) |
|---|
| 2026 SLG 275 2026 SLD 275 |
ITA No.31/IB/2026 MA(Stay) No.149/IB/2026 (Tax Year, 2023)
Presented By: (M. M. AKRAM) JUDICIAL MEMBER (SHARIF UD DIN KHILJI) MEMBER
Appellant By: Mr. Zahid Shafiq, Advocate
Respondent BY: Mr. Naveed Hassan, DR Date of Hearing: 10.02.2026 Date of Order: 10.02.2026
Mr. Haroon Haider Bhatti; H. No.121, Block G, Street 12, DHA Phase-6, Lahore. NTN:3540416430383 Appellant
VS
Commissioner Inland Revenue, LTO, Islamabad. Respondent
Law: Income Tax Ordinance, 2001
Section: 39, 37, 120, 122(5A), 120(1)(b), 122, 122(9), 39(1), 37(5)
SUMMARY;
The Appellate Tribunal Inland Revenue annulled lower authorities' orders taxing an individual's gain from selling two personal-use motor vehicles (Rs. 7,880,000) as "Income from Other Sources" under section 39(1) of Pakistan's Income Tax Ordinance, 2001.
Key Facts
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Taxpayer filed return for TY 2023 declaring Rs. 13.5 million income; vehicle sale gains were disclosed in wealth statement but not income due to a clerical mix-up and claim of non-taxability.
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Additional CIR amended assessment under section 122(5A), treating gains as taxable under section 39(1); CIR(Appeals) upheld this on Nov 22, 2024.
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Islamabad High Court directed appeal to Tribunal per Dec 2, 2025 order; heard Feb 10, 2026.
Tribunal's Reasoning
Section 37 charges capital gains tax on "capital assets," but excludes movable property (like personal vehicles, excluding jewelry) held for non-business use under section 37(5). Thus, no capital gain arises here.
Section 39 is residual for unexplained/unclassifiable income otherwise taxable—it cannot override section 37's exclusion or reclassify known receipts. Judicial precedents (e.g., CIT v. Sohaib Nisar) affirm specific provisions prevail over general ones.-