Law: Income Tax Ordinance, 1979

Section: 136,34,26

Income Tax Ordinance (XXXI of 1979)----S.136---Hyderogenated Vegetable Oil Industry Act (Control and Development) Act (LXV of 1973), S.26---Reference to High Court ---Scope-­Assessee., an individual had shares in a limited company running the business of oil which was taken over by the Government---Receipt of minimum guaranteed return by assessee as a substitute for the compensation bonds for taking over the Oil Mill by the Government---Nature of receipt ---Taxability-­Assessing Officer issued a notice under S.34, Income-tax Act, 1922 on the ground that assessee had failed to indicate various amounts in each year received under S.26, Vegetable Oil Industries Act, 1963---Contention of the assessee that the amount represented minimum guaranteed return in the form of compensation and, therefore, did not represent income but casual gain,, was rejected---Appellate Tribunal had found that "admittedly minimum guaranteed return was received by the assessee as a substitute for the compensation bonds and was of capital nature"---Tribunal had found. as a fact that revenue had admitted that amounts received by the assessee represented a substitute for the compensation bonds---Revenue claimed that the amounts received amounted to income on compensation bonds which were given to the assessee--Revenue having not been able to controvert the facts as found by the Tribunal, question as framed that "the amount received by the assessee was of a capital nature -and as such. not taxable" did not arise out of the order of the Tribunal---Answer was declined by the High Court. THIS ORDER PASSED BY : NASIM SIKANDAR, J.---This reference has been made at the instance of the Commissioner of Income Tax Central Zone, Lahore to solicit our opinion and answer to the following questions:--- "Whether on the facts .and -in the circumstances of the case, the Tribunal was justified in holding that the amount received by the assessee was of a capital nature and as such not taxable?" 2. The facts in brief are that .the assessee an individual for the assessment years 1974-1975 to 1977-1978 filed his return which was finalized under section 34(3) of the late Income-tax Act, 1922. The assessee had…

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