Law: Income Tax Ordinance, 1979

Section: 27,50(5),(4),30

(a) Income Tax Ordinance (XXXI of 1979)----S.27---Capital gains---Taxation---Principles---Right to carry on a business in a capital asset---Profits and gains from transfer of intangible assets are chargeable to tax as capital gains under S.27 of the Income Tax Ordinance, 1979---Profits and gains on sale, exchange or transfer of an asset can be computed for purposes of S.27 of the Income Tax Ordinance, 1979 even if the cost of acquisition of the asset is nil. I.T.A. No.698 of 1998-99 rel. (b) Income Tax Ordinance (XXXI of 1979)--- ----Ss. 27 & 30---Capital gains---Income from other sources---Receipt in terms of compensation for termination of distributorship agency was taxed under S.30 of the Income Tax Ordinance, 1979---Validity--­Compensation received was for transfer or relinquishment of a right 'i.e. distributorship of two products---Such right was clearly a capital asset and the compensation received for its transfer was chargeable to tax under S.27 of the Income Tax Ordinance, 1979 as it was not specifically excluded from the purview of S.27(2)(b)(i), (ii), (iii) & (iv) of the Income Tax Ordinance, 1979---Such receipt were chargeable to tax as "capital gains" under S.27 of the Income Tax Ordinance, 1979 and not as casual income---Orders of two officers below were modified accordingly by the Tribunal. 1998 PTD (Trib.) 11.03 distinguished. 1999 PTD (Trib.) 2356 and I.T.A. No.698 of 1998-99 rel: (c) Income Tax Ordinance (XXXI of 1979)--- ----S.50(5) & (4)---Deduction of tax at source---Supply of imported goods---Assessing Officer treated the tax deducted under S.50(4) of the Income Tax Ordinance, 1979 on, supplies of imported goods as part of final discharge of tax liability which action was maintained by the First Appellate Authority---Validity---Once the goods had suffered incidence of tax under S.50(5) of the Income Tax Ordinance, 1979 at the import stage, it would amount to full and final discharge of tax liability and no further deduction could be made under S.50(4) of the Income Tax Ordinance, 1979 on supplies of the same goods---Order of the First Appellate Authority was vacated by the Tribunal being contrary to law. 1997 PTD 1143 rel.…

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