| Case ID |
1a5018da-fb19-4aae-9325-eb8c55fbc8bf |
| Body |
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| Case Number |
Civil Reference No. 4 of 1951 |
| Decision Date |
Mar 03, 1954 |
| Hearing Date |
|
| Decision |
The Lahore High Court determined that the interest on securities issued by the Government of India prior to partition is not assessable under Section 8 of the Income Tax Act, 1922, as it pertains to the Central Government of Pakistan. The court emphasized that Section 8 is a machinery section and not a charging section, meaning that income must be defined under Section 4 before tax can be applied. The court ruled that the securities in question remained liabilities of the Dominion of India post-partition, thus exonerating the Federation of Pakistan from any liability. The court also addressed the misinterpretation of 'receivable' by the Income-tax Officer, clarifying that mere due dates do not establish liability without the presentation of interest coupons. This case underscores the importance of statutory definitions and jurisdictional clarity in taxation matters. |
| Summary |
In the landmark case of Civil Reference No. 4 of 1951, the Lahore High Court addressed critical questions regarding the applicability of the Income Tax Act, 1922, specifically focusing on the interpretation of 'Central Government' and the taxability of interest on securities issued by the Government of India prior to partition. The court ruled that such interest is not taxable in Pakistan, emphasizing that Section 8 serves only as a machinery section, and income must first be defined under Section 4. The decision highlighted the complexities of post-partition financial liabilities and the necessity for clarity in tax law interpretation. The ruling also reinforced the principle that tax liability cannot be established merely on due dates; actual receivability must be substantiated, particularly in the context of interest on government securities. This case serves as a pivotal reference for taxation law and the interpretation of governmental obligations in the context of historical legal frameworks. |
| Court |
Lahore High Court
|
| Entities Involved |
CENTRAL EXCHANGE BANK LTD., LAHORE,
COMMISSIONER OF IncomE tax, LAHORE
|
| Judges |
B. Z. Kaikaus,
Akhlaque Husain
|
| Lawyers |
M. Anwar,
M. A. Rahman,
Fazal Din,
Malik Muhammad Husain
|
| Petitioners |
CENTRAL EXCHANGE BANK LTD., LAHORE
|
| Respondents |
COMMISSIONER OF IncomE tax, LAHORE
|
| Citations |
1960 SLD 100,
1960 PTD 987
|
| Other Citations |
Firm of Narayandas Kedarnath v. Commissioner of Income tax, Central (1952) 22 I T R 18
|
| Laws Involved |
Income Tax Act, 1922
|
| Sections |
66,
8,
10,
12,
4
|