Law: Income Tax Ordinance, 1979

Section: 50(4),80C

[Income Tax Ordinance (XXXI of 1979)].....Sections 50(4) & 80-C---Loan obtained from Modaraba Company through sale and lease back of assessee's machinery on paper without transfer of possession to company---Deduction of tax by company under S.50(4) of Income Tax Ordinance, 1979 while paying loan amount to assessee---Treatment of such tax as full and final discharge under S.80-C of Income Tax Ordinance, 1979 by Assessing Officer---Validity---Section 50(4) of Income Tax Ordinance, 1979 would not apply to such case for not being a contract with government or case of supply of service---Provision of S.80-C of the Ordinance, in case of recipient would apply only when he was liable to deduction of tax under S.50(4) thereof, but otherwise not---Neither such machinery fastened to earth could be called as goods nor there was transfer of possession by assessee to Modaraba Company---Such sale and lease back arrangement being a financial arrangement to secure loan transaction could not be considered as a supply---Relationship of Bank with borrower in similar transaction was on basis of providing security in terms of pledging of property, thus, there was neither a relationship of buyer and seller nor of demand and supply---if a person was not liable to charge of tax for an activity in normal course, then deduction of withholding tax and considering same as full and final discharge under presumptive tax regime would be nothing more than showing muscles by revenue authorities---Provision of S.50(4)(b)(i) as amended by Finance Ordinance, 1998 had redressed grievance of persons obtaining loan and cured inconvenience being caused to them by authorities by deduction of tax and treating same as tax payable on revenue transaction---Such amendment being remedial and curative would apply to all pending cases---Principles. Black's Law Dictionary p.1439; Words and Phrases Vol. III of 1996; 2002 PTD (Trib.) 2210 and Kawther Grain (Pvt.) Ltd. v. Deputy Commissioner of Income Tax/Wealth Tax, Circle-I, Companies Zone, Gujranwala 1999 PTD 4028 ref. (b) Interpretation of statutes Particular connotation not defined in original law---Adopting ordinary dictionary meanings would always be…

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