Law: Income Tax Ordinance, 1979

Section: 2(12),2(24),80D,SecondSched.

Income Tax Ordinance (XXXI of 1979)---Ss. 2(12), 80-D & Second Sched., Cl. (104)---Capital gains, declaration of---Non-inclusion of receipts derived from sale of shares by assessee (N.I.T Limited) in its turnover---Validity---Such receipts could not be included in turnover for purpose of charge under S.80-D of Income Tax Ordinance, 1979 for being restricted only to gross receipts derived from sale of goods and not extended to sale of capital assets---Exemption granted to assessee against charge under S.80-D of Income Tax Ordinance, 1979 for being beneficial in nature was retrospective and would attract to pending proceedings---Principles. Commissioner of Income Tax v. Gates (Pvt.) Ltd. 2002 PCTLR 888 and Commissioner of Income Tax v. Shahnawaz Limited 1993 SCMR 73 rel. THIS JUDGMENT DELIVERED BY: ARSHAD SIRAJ MEMON, J.---By this Income Tax Appeal filed against the order of the Income Tax Appellate Tribunal passed on 27-9-1999 the following questions, said to have arisen out of that order have been proposed for the opinion of this Court:- (1) "Whether on the facts and circumstances of the case the learned Income Tax Appellate Tribunal was justified in holding since the capital gains declared by the assessee did not attract the provisions of section 80-D of the Income Tax Ordinance, 1979, consequently, purchase and sale of shares also did not constitute turnover or cannot be termed as turnover?" (2) "Whether on the facts and circumstances of the case the learned Income Tax Appellate Tribunal was justified in holding that the amendment in clause (2) in Part-IV of second schedule to the Income Tax Ordinance 1979 specifically exempting transactions in Stock & Shares from the purview of section 80-D is merely of clarificatory nature and has retrospectivity although the retrospectivity has not been notified in the said clause?" 2. The brief facts of the case are that the assessee is a mutual fund which is managed by N.I.T. Limited . The assessee/respondent claimed exemption under clause 104 of the 2nd Schedule to the Income Tax Ordinance, 1979 which was allowed, assessment was framed under section 62 and consequently tax under section 80--D was not charged. On…

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