Law: Income Tax Act, 1922

Section: 2(4A),12B,.5(8)

Law: Constitution of Pakistan, 1973

Section: 199

(a) Income Tax Ordinance (XXXI of 1979)---S. 8---Income-tax Act (XI of 1922), S.5(8)---Orders, instructions and directions of the Central Board of Revenue are binding on all the officers entrusted with the execution of the statute. (b) Constitution of Pakistan (1973)--- ----Art. 199---Constitutional jurisdiction can be exercised in appropriate cases, involving fiscal rights and on the allegation of misapplication of law or abuse of power stepped in to examine whether or not public functionary concerned acted in accordance with the powers conferred on him by the statute. Messrs Usmania Glass Sheet Factory Ltd. Chittagong v. Sales Tax Officer, Chittagong P L D 1971 SC 205 ref. (c) Income-tax--- ----Company---Nature of transaction---Memorandum of Association was not the sole test of adjudging the commercial nature of the transactions carried on by a company and it merely specified the functions which could lawfully be undertaken by a company. (d) Income Tax Ordinance (XXXI of 1979)--- ---Ss. 27 & 28---Capital gain--Computation of---Immovable property is excluded from the 'capital assets' on the transfer whereof capital gains might arise and further the compulsory acquisition of any 'capital asset' is not treated as transfer for the purposes of computation of capital gains under S.28. (e) Income Tax Act (XI of 1922)--- ---Ss. 2(4-A) & 12-B, Proviso---Constitution of Pakistan (1973), Fourth Schedule, Part I, Federal Legislative List, item 50---Expression 'capital gains' definition of---'Capital gains' does not include immovable property--¬Compulsory acquisition of capital assets was not to be treated as transfer of capital assets---Exclusion of immovable property from the ambit of 'capital gains' was in line with item 50 of the Federal Legislative List Part I, Fourth Schedule of the Constitution of Pakistan (1973). (f) Income Tax Ordinance (XXXI of 1979)--- ----Ss. 27 & 28---Constitution of Pakistan (1973), Fourth Schedule, Part I, Federal Legislative List, item No.50---Capital gains---Computation of--¬Transfer of immovable property---Imposition of tax on the capital gains arising from the transfer of immovable property was beyond the taxing power of the…

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