Law: Income Tax Ordinance, 1979

Section: 12(18)

Income Tax Ordinance (XXXI of 1979)----S.12 (18)---Income deemed to accrue or arise in Pakistan---Gift of prize bonds---Addition of---Assessee contended that gift of prize bond was in accordance with the provisions of Islamic Law; and Islamic Law being special law would not override the provision of S.12(18) of the Income Tax Ordinance, 1979; and the provisions of S.12(18) of the Income Tax Ordinance, 1979 dealt with loans, gift and advances of cash therefore gift of prize bond did not fall within the scope of said section as the prize bonds were not considered to be cash in terms of provisions of S.12(18) of the Income Tax Ordinance, 1979---Addition was deleted by the First Appellate Authority with the observation that the prize bonds did not fall within the ambit of S.12(18) of the Income Tax Ordinance, 1979---Validity--According to contention of the Department, prize bonds were equivalent to cash which meant that even according to view point of the department the prize bonds in itself were not the cash---Provisions of S.12 (18) of the Income Tax Ordinance, 1979 required the transaction of loan or advance or gift through a cross cheque drawn on bank or through a banking channel which was only possible in the case of transaction in respect of cash and not otherwise---Word "sum" used in S.12 (18) of the Income Tax Ordinance, 1979 could not be stretched to include the other items, even if those were easily convertible into cash---Finding of First Appellate Authority that "prize bonds as such did not fall within the ambit of S.12(18) of the Income Tax Ordinance, 1979" was upheld by the Appellate Tribunal and order was maintained. (1959) 17 ITR 489; Black Law's Dictionary 1287 (5th Edition); 1987 SCMR 1403; I.T.A. No. 495/IB/1987/1988 and PLD 1985 SC 159 ref. ORDER KHALID WAHEED AHMED (JUDICIAL MEMBER).---The above titled departmental appeal is directed against the order, dated 12-5-2003 of CIT/WT(A) Zone-II, Islamabad. 2. Mr. Sikandar Hayat, Advocate, the learned A.R. appeared on behalf of the assessee and Mr. Abdul Shakoor, the learned D.R. appeared on behalf of the department. 3. Brief facts of the case are that proceedings in the case of assessee-respondent an…

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