| Case ID |
021ede89-f970-40d8-b644-eb128896af6a |
| Body |
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| Case Number |
Civil Petition for Leave to Appeal No. 4-K of 1983 |
| Decision Date |
Jan 30, 1986 |
| Hearing Date |
Jan 30, 1986 |
| Decision |
The Supreme Court dismissed the petition for leave to appeal filed by the Commissioner of Income-tax (West), Karachi, affirming the decision of the High Court which held that the net loss incurred in a speculative business should not be distributed among partners but can be carried forward for set off against future profits. The court found no merit in the department's argument and upheld the view that the first proviso of section 24(1) is an independent provision, allowing firms to carry forward losses from speculative business without apportioning them among partners. |
| Summary |
In the case of 'Commissioner of Income Tax (West) Karachi vs. Haji Gulzar and sons', the Supreme Court of Pakistan addressed the interpretation of the Income-tax Act regarding the treatment of losses from speculative businesses. The court examined whether losses should be distributed among partners or carried forward for future set off. The ruling confirmed that losses from speculative businesses cannot be divided among partners and must be carried forward in accordance with section 24(2) of the Income-tax Act. This decision reinforces the legal framework guiding income tax assessments and the treatment of speculative losses, providing clarity on the handling of such cases in future tax proceedings. This case is significant for tax lawyers and advocates working in income tax law, especially in the context of partnership firms engaged in speculative activities. Keywords: Income-tax Act, speculative business losses, Supreme Court Pakistan, tax law, partnership taxation, legal precedent in tax cases. |
| Court |
Supreme Court of Pakistan
|
| Entities Involved |
Commissioner of Income Tax (West), Karachi,
Haji Gulzar and sons
|
| Judges |
MUHAMMAD HALEEM, C.J.,
ABDUL QADIR SHAIKH,
ZAFFAR HUSSAIN MIRZA, JJ
|
| Lawyers |
Nasrullah Awan, Advocate Supreme Court,
Muzaffar Hassan, Advocate-on-Record
|
| Petitioners |
COMMISSIONER OF Income Tax (WEST) KARACHI
|
| Respondents |
HAJI GULZAR and sons
|
| Citations |
1986 SLD 825,
1986 SCMR 1315
|
| Other Citations |
Commissioner of Income-tax, Gujrat v. Kuntilal Oathuchand, Sami (1967) 63 I T R 318,
Commissioner of Income-tax v. Messrs Haji Ferozuddin P L D 1967 Kar. 812,
Haji Mushtaq Ahmad v. Commissioner of Income-tax P L D 1978 Kar. 414
|
| Laws Involved |
Income-tax Act (XI of 1922),
Constitution of Pakistan (1973)
|
| Sections |
24(1),
24(2),
Art. 185(3)
|