Law: Income Tax Ordinance, 1979

Section: 12,(18)

(a) Income Tax Ordinance (XXXI of 1979)----S.12(18)---Deemed income---Share deposit money---Treatment of share deposit money as loan---Amount admittedly had been shown as share deposit money and had not been claimed or shown as loan in the balance-sheet but in reality that may be a loan, the deeming provisions contained in S.12(18) of the Income Tax Ordinance, 1979 were not attracted in such an eventuality---No law can be allowed to be circumvented by use of wrong expression or incorrect terminology because that would amount to allowing perpetual fraud on the law with impunity-- -Where two interpretations were equally possible, the one favourable to the subject was to be adopted- -Letter of law in taxing statute had to be interpreted in the sense it had been used and expressed-­Terminology used as share deposit money in the balance-sheet could not take place that of a "loan" because the expression "loan" had always inherent characteristic to be repaid or returned after a certain or in some cases uncertain limit of time with or without interest---Provisions of S.12(18) of the Income Tax Ordinance, 1979 were not attracted where the assessee had claimed or shown share deposit money in the balance-­sheet-unless otherwise controverted by the department with unequivocal evidence: (b) Interpretation of statutes---- ---.-Two interpretations possible---Principles---No law can be allowed to be circumvented by use of wrong expression or incorrect terminology because that would amount to allowing perpetual fraud on the law with impunity---Where two interpretations were equally possible, the one favourable to the subject was to be adopted---Letter of law in taxing statute had to be interpreted in the sense it had been used and expressed. (c) Income Tax Ordinance (XXXI of 1979)--- ----S.12(18)---Deemed income---Share deposit money---Payment was made by the Directors of the company to the suppliers of goods for the creation of the assets of the company---Such amount was shown as share deposit money of the Directors in the balance-sheet---Assessing Officer treated the same as loan and addition was made under S.12(18) of the Income Tax Ordinance, 1979---Validity---Amount in…

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