| Case ID |
419f1e4e-a171-4c10-9c24-c44e8d732958 |
| Body |
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| Case Number |
ITA No. 1480/LB/2015 |
| Decision Date |
Feb 04, 2016 |
| Hearing Date |
Feb 02, 2016 |
| Decision |
The Appellate Tribunal Inland Revenue determined that the assessment made by the Additional Commissioner Inland Revenue was illegal. The Tribunal ruled that the government subsidy was not included in the definition of turnover as per Section 113 of the Income Tax Ordinance, thus the taxpayer was not liable to pay minimum tax on such receipts. The Tribunal emphasized the importance of adhering to higher court rulings and found that the CIR(A) had failed to apply the law correctly, leading to the annulment of the impugned order under Section 122(5A). |
| Summary |
The case revolves around the appeal of M/s. LESCO Limited against the order of the CIR (Appeals-II) regarding the assessment of tax for the year 2014. The case highlights the interpretation of government subsidies in relation to turnover as defined under the Income Tax Ordinance. The Appellate Tribunal found that the CIR had misapplied the law by treating the subsidy as taxable income, contrary to previous rulings that clarified subsidies do not constitute turnover. This case underscores the critical nature of compliance with established legal precedents in tax law and the necessity for tax authorities to act within the bounds of legal jurisdiction. The Tribunal's decision reinforces taxpayer rights against erroneous assessments and ensures clarity in the treatment of government subsidies for tax purposes, paving the way for a more equitable tax system. |
| Court |
Appellate Tribunal Inland Revenue
|
| Entities Involved |
CIR, RTO, Lahore,
M/s. LESCO Limited, Lahore
|
| Judges |
NAZIR AHMAD,
MASOOD AKHTAR SHAHEEDI
|
| Lawyers |
Mr. Kamran Iqbal Butt, FCA,
Mr. Muhammad Anwar Ch.,
Mr. Bilal Asghar Malik, DR
|
| Petitioners |
M/s. LESCO Limited, Lahore
|
| Respondents |
The CIR, RTO, Lahore
|
| Citations |
2016 SLD 201
|
| Other Citations |
(2010) 101 Tax 174 (H. C. Isl),
PLD 1997 SC 582
|
| Laws Involved |
Income Tax Ordinance, 2001,
Income Tax Ordinance, 1979
|
| Sections |
120,
122(5),
122(5A),
122(9),
113,
80D
|