| Case ID |
39f71461-bd5f-40e7-b84b-e94addd2f283 |
| Body |
View case body. Login to View |
| Case Number |
I.T.As. Nos. 577/KB and 880/KB of 2005 |
| Decision Date |
Jan 09, 2007 |
| Hearing Date |
|
| Decision |
The Income Tax Appellate Tribunal dismissed the appeals filed by the department against the order of the learned C.I.T.(A) which annulled the assessment order under section 122(5A) of the Income Tax Ordinance, 2001. The Tribunal upheld that the section 122(5A) was not applicable to assessments finalized before 1-7-2003. The Tribunal also found that the curtailment of food and beverage costs and other expenses by the Taxation Officer lacked basis and evidence. The Tribunal directed the acceptance of the declared food and beverage costs and ruled that the shop license fee should be treated as business income. The appeals were dismissed based on the merits of the arguments presented and the historical context of similar cases. |
| Summary |
This case revolves around the appeals filed by the department against the decisions made by the learned C.I.T.(A) regarding the assessment years 1996-97 and 2002-03 under the Income Tax Ordinance. The main issues included the applicability of section 122(5A) of the Income Tax Ordinance, 2001, which was found to be inapplicable to assessments finalized before 1-7-2003. The Tribunal emphasized that the Taxation Officer's curtailment of food and beverage costs to 35% was unjustified, as it relied on parallel cases without substantiation. The Tribunal upheld the declarations made by the assessee regarding food and beverage costs and ruled that the shop license fee constituted business income, not property income. The decision highlights the importance of substantiated evidence in tax assessments and the binding nature of Supreme Court decisions as per Article 189 of the Constitution of Pakistan. This case is significant for businesses in the hospitality sector, as it clarifies the treatment of food and beverage costs and income classifications under the Income Tax Ordinance. |
| Court |
Income Tax Appellate Tribunal
|
| Entities Involved |
Not available
|
| Judges |
JAWAID MASOOD TAHIR BHATTI, JUDICIAL MEMBER,
CH. NAZIR AHMED, ACCOUNTANT MEMBER
|
| Lawyers |
Dr. Muhammad Ali Khan, D.R. for Appellant,
Abid Shaban for Respondent
|
| Petitioners |
Not available
|
| Respondents |
Not available
|
| Citations |
2007 SLD 84,
2007 PTD 1509,
(2007) 96 TAX 71
|
| Other Citations |
1994 PTD 517,
2004 PTD 2231,
1986 PTD 84,
1962 PTD (Trib.) 23,
1990 PTD (Trib.) 731,
1980 42 Tax 119,
1994 PTD 174,
2002 PTD 407,
1986 SCMR 968,
1988 PTD 626,
1987 PTD 149
|
| Laws Involved |
Income Tax Ordinance, 2001,
Income Tax Ordinance, 1979
|
| Sections |
122,
122(5A),
62,
66,
66A,
50,
24,
19,
20(a)
|