Law: Income Tax Ordinance, 1979

Section: 50(7A)

Income Tax Ordinance (XXXI of 1979)----S.50(7-A), Explanation---Sale price of the property sold by the Government, Local Council or a Public Company---Deduction of tax at source---Principles---"Sale of property" includes lease of rights for collection of octroi duties; tolls, fees and other levies. Section 50(7-A) of Income Tax Ordinance, 1979 postulates deduction of advance tax at the rates specified in the First Schedule on the sale price of the property sold by the Government, Local Councils or a Public Company. In the present case even though the entire amount for which the lease had been obtained by the assessee might not constitute their income but section 50(7-A) only provides a mode for recovery of tax in advance and in. anticipation of assessment, which has to be made in due course. Any deduction made as advance tax is subject to adjustment. After the liability of the assessee has been ascertained and quantified by assessment, if the tax assessed is more than the advance tax recovered, the assessee shall be liable to pay the difference. Similarly, if the liability is less than the advance tax, the excess amount shall have to be refunded. It could not, therefore, be said that the petitioners were being asked to pay tax on something other than their income. The manner of collection of tax has no significance. What is important is to see as to whether the assessees have been granted right to retain the proceeds collected by assessee on account of taxes, octroi etc. The explanation to section 50(7-A) of the Ordinance as added by . Finance Ordinance, 1984 being clear and explicit does not leave any room for doubt that so far as section 50(7-A) is concerned the sale of property would include, lease for collection of octroi, duties, tolls, fees and other levies. Ordinary meaning of the word "sale" has been extended by the Legislature by inserting the explanation specifically. (b) Income Tax Ordinance (XXXI of 1979)--- -----S.50(7-A), Explanation---Word "sale" as used in S.50(7-A; Connotation---Ordinary meaning of the word 'sale' as used in S.50(7-A) the Ordinance has been extended by the "Explanation" subsequently added this clause in order, to include lease…

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