Law: Income Tax Act, 1922

Section: 2(4A),6,12

Law: West Pakistan Finance Act, 1962

Section: 16

Law: Constitution of Pakistan, 1973

Section: 199

(a) Constitution of Pakistan (1973)---Art. 199--West Pakistan Finance Act (IX of 1963), S.16(2)--Income-tax Act (XI of 1922). Ss. 2 (4-A), 6 & 12--Gain tax--Petitioners carrying on business of acquiring properties, raising construction on plots and dealing purchase and sale of real estates arid making profits out of difference--Held, capital gains arising from such sale, exchange or transfer of immovable property, not chargeable to income-tax but chargeable to tax under Provincial Capital Gains Tax levied by Finance Act, 1963. (b) Constitution of Pakistan (1973)- ---Art 199--West Pakistan Finance Act (IX of 1963), S.16--income-tax Act (XI of 1922), Ss. 2 (4-A) 6 & 12--Gain tax--Contention that petitioner carrying on business of acquiring properties, raising construction on plots and dealing purchase arid sale of real estate and making profits out of difference as such gain/profit from sale of property cannot be treated as a capital gain, held, not correct--Petitioner earning profit on sale of property, as such liable to pay capital gains tax under Provincial Capital Gains Tax. JUDGMENT NASIR ASLAM ZAHID, J.-- The petitioner is a partnership concern and it is averred by the petitioner that they are carrying on the business of acquiring properties, raising constructions on plots and dealing in the purchase arid safe of real estates and making profits out of the difference of purchase and sale of such properties. It is further averred that such properties are held by the petitioner as stock-in-trade or product of their business as a trader or manufacturer. According to the petitioner, dealing with the immovable properties is the normal business activity of the petitioner and they hold air deal with such properties as a trader and not as an owner thereof. During the course of their business, it is averred, the petitioner acquired the property in question situated in Defence Housing Society, Karachi, and after completing the building, it was sold to a buyer and in this process a profit was earned by the petitioner firm. According to the petition, the profit earned from the sale of this property was shown in the accounts of the petitioner as a gain through…

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