| Case ID |
04568a54-c069-430d-9ed1-446489d285af |
| Body |
View case body. Login to View |
| Case Number |
Income-tax Reference No. 2 of 1970 |
| Decision Date |
Jan 18, 1978 |
| Hearing Date |
Nov 03, 1977 |
| Decision |
The court held that losses in speculative transactions cannot be set off against profits from any other non-speculative business under section 10 of the Income-tax Act, in view of the first proviso to section 24(1) of the Act. The judgment emphasized the distinction between speculative and non-speculative businesses, ruling that losses from speculative activities must be offset solely against profits from speculative activities. This interpretation is vital for understanding the limitations imposed on tax deductions related to speculative losses. |
| Summary |
In the landmark case of Income-tax Reference No. 2 of 1970, the Sindh High Court examined the implications of the Income Tax Act, 1922 concerning speculative losses. The case revolved around whether losses incurred in speculative transactions could be set off against other business profits. The court concluded that such losses must be treated distinctly and can only be offset against profits from the same speculative business. This ruling clarifies the application of section 24(1) and its proviso, establishing a precedent for future tax assessments. The judgment serves as a critical reference for tax practitioners and businesses engaged in speculative activities, ensuring compliance with tax regulations while optimizing financial strategies. Keywords such as 'Income Tax Act', 'speculative business losses', and 'tax law compliance' are essential for SEO optimization, targeting legal professionals and businesses seeking clarity on tax implications. |
| Court |
Sindh High Court
|
| Entities Involved |
Not available
|
| Judges |
I. Mahmood,
Zaffar Hussain Mirza
|
| Lawyers |
M. Iqbal Naeem Pasha,
Mansoor Ahmad Khan
|
| Petitioners |
Hafiz Mushtaq Ahmad & Company
|
| Respondents |
Commissioner of Income Tax
|
| Citations |
1978 SLD 294,
(1978) 38 TAX 1,
1978 PTD 115,
1978 PLD 414
|
| Other Citations |
Not available
|
| Laws Involved |
Income Tax Act, 1922
|
| Sections |
66(1),
10,
24(1),
6,
5,
12(1)
|