Law: Income Tax Ordinance, 1979

Section: 12,12(18),66,66A

(a) Income Tax Ordinance (XXXI of 1979)----Ss.12{18) & 66-A---Income deemed to accrue or arise in Pakistan---Share deposit money---Authorised capital---Loan---Share deposit money was treated as loan on the ground that it was in excess of authorised capital-treated was neither competent nor had any authority to call for share deposit in excess of authorised capital---Department proceeded in accordance with law---Revising Authority was justified in invoking the provisions of S.66-A of the Income Tax Ordinance, 1979 by treating the share deposit money as loan under S.12(18) of the Income Tax Ordinance, 1979 in circumstances ---Assessee's appeal was rejected by the Tribunal. Messrs Kanwar Textile Mills Limited. Lahore I.T.A. N6.983/LB of 1997; PLD 1966 SC 738; PLD 1979 Lah. 252; 1999 PTD 2949; 1999 PTD 2895; 1996 SCMR 1264; PLD 1971 Lah. 217; 1994 PTD 758 and 1999 PTD (Trib.) 1672 ref. Messrs Quality Casting (Pvt.) Limited, Lahore I.T.A. No. 1206/LB of 1995-96 rel. (b) Income Tax Ordinance (XXXI of 1979)----S.12(18)---Deemed income---Intention of Legislature---Plain reading of provision contained in S.12(18) of the Income Tax Ordinance, 1979 shows that the intention of Legislature was that if any transaction was claimed or shown which was in the nature of a loan then the deeming provision shall come into operation. (c) Administration of justice--- Duty of Court---True facts are to be discovered by the Court and then the law is to be applied to such facts. (d) Income-tax----Charge of tax---Substance and real nature of the transaction in all judicial proceedings including tax proceedings is to be seen for the simple reason that when the Legislature invests a taxing authority with the power and jurisdiction to tax a particular transaction then it empowers such Authority to discover the real nature of transaction and apply the correct law. THIS ORDER PASSED BY: MUHAMMAD TAUQIR AFZAL MALIK (JUDICIAL MEMBER). ---These two appeals for the years 1992-93 and 1993-94 were earlier heard by a Division Bench on 3-6-1999. Both the assessee as well as the Revenue has supported there arguments with two different orders of the Tribunal. The assessee placed reliance on the case…

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