Law: Income Tax Ordinance, 1979

Section: 27

Income Tax Ordinance (XXXI of 1979)---S. 27---Capital gain---Assessee was a retired Government servant and was allotted a plot for construction of flats---Plot was sold out and proceeds from such sale of plot were claimed exempt under S.27 of the Income Tax Ordinance, 1979 as capital gain--First Appellate Authority found that the assessee had purchased the plot with the intention of going into business of housing project which could not materialize for various reasons including lack of finance and old age--Contention. of the assessee that this was a solitary transaction was not accepted as he was found to be dealing in real estate---Gain was treated as a revenue gain--­Assessing Officer was directed by the First Appellate Authority to accept the declared sale price in view of the fact that the same value had been accepted as declared by the purchaser of the same plot --- Validity ---held, what had to be seen in a transaction of this type was the intention of the assessee at the time of acquisition of the property---Admittedly, the assessee had been allotted this plot for the construction of flats and it was not the claim of the assessee that he intended to use all such flats for his personal need---Intention thus was to sell the flats at a profit---First Appellate Authority rightly directed the Assessing Officer to accept the declared sale price as the same had been accepted in the case of the purchaser of .the same property---Department could not make a discriminatory treatment in respect of the same transaction between the two parties---Appeals were dismissed and order of the First Appellate Authority was maintained by the Tribunal. Samina Shaukat Ayub's case AIR 1932 TC 138; 1984 PTD (Trib.) 127; 1975 PTD (Trib.) 6 and 1991 PTD (Trib.) 786 ref. ORDER INAM ELLAHI SHEIKH (CHAIRMAN). ---These two cross appeals arise out of an order dated 27-2-1996 recorded by learned Commissioner of Income-tax (Appeals), Zone-VI, Karachi in the case of an individual assessees. 2. The relevant facts in brief are that the assessee is a retired Government servant and he was allotted a plot for construction of flats on 17-3-1987 measuring 4886.67 sq. yds. For a consideration of…

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