| Case ID |
25db3f49-231e-4083-8e4d-065b2e0c3728 |
| Body |
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| Case Number |
Income Tax Reference No. 174 of 1991 |
| Decision Date |
Oct 13, 1998 |
| Hearing Date |
Oct 13, 1998 |
| Decision |
The court held that the sale proceeds from the disposal of the entire poultry farming business, which included all assets, should not be subject to tax under the Income Tax Ordinance, 1979. The Appellate Tribunal's decision to exclude the income from tax was affirmed, emphasizing that the transaction qualified as a 'slump sale' where it was not possible to assign a specific value to individual assets sold. The findings were based on the interpretation of non obstante clauses in the relevant sections of the law, which indicated that the provisions governing exemptions must be prioritized over conflicting rules. |
| Summary |
In the Income Tax Reference No. 174 of 1991, the Sindh High Court addressed the taxation implications of proceeds from the sale of a poultry farming business. The core issue revolved around whether the profit from the sale should be taxed under the Income Tax Ordinance, 1979. The court examined relevant sections of the ordinance, especially those concerning exemptions for income derived from poultry farming. The judges deliberated on the nature of the sale transaction, categorizing it as a 'slump sale' due to the sale of the entire business as a single entity without the ability to assign individual values to its components. The court ultimately upheld the Appellate Tribunal's ruling that the sale proceeds were exempt from taxation. This case highlights the importance of understanding non obstante clauses in statutory interpretation and their effect on tax liabilities, particularly in complex business transactions. The decision reinforces the principle that exemptions provided in the law take precedence over general provisions when conflicts arise, ensuring that business transactions are treated fairly under the legal framework. |
| Court |
Sindh High Court
|
| Entities Involved |
NATIONAL AGRICULTURE LTD., KARACHI
|
| Judges |
SAIYED SAEED ASHHAD,
S. AHMED SARWANA
|
| Lawyers |
Shaikh Haider,
Mansoor Ahmed Khan,
C.N. Ramachandran Nair,
A.K.J. Nambiar
|
| Petitioners |
COMMISSIONER OF Income Tax
|
| Respondents |
NATIONAL AGRICULTURE LTD., KARACHI
|
| Citations |
2000 SLD 277,
2000 PTCL 282,
2000 PTD 2173,
(2000) 81 TAX 249,
(2000) 82 TAX 73
|
| Other Citations |
Packages Limited and others v. Muhammad Maqbool PLD 1991 SC 258,
Federation of Pakistan and others v. Saeed Ahmed and others PLD 1974 SC 151,
Arif Hussain Shah v. The Operative Director Administration, Electric Equipments Manufacturing Co. Limited 1979 PLC 389,
Al-Samrez Enterprises v. The Federation of Pakistan 1986 SCMR 1917,
Commissioner of Income-tax v. Ayurvedic Pharmacy (Dacca) Limited and others PLD 1970 SC 93,
Commissioner of Income-tax (East) v. Messrs Crescent Pak Soap and Oil Mills Ltd. 1985 PTD 3
|
| Laws Involved |
Income Tax Ordinance, 1979
|
| Sections |
Second Schedule, Part I, cl. 99,
Third Schedule, cl. 7(c)
|