| Case ID |
44ca6551-d697-4ca3-8ca4-8d56e3c1eadd |
| Body |
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| Case Number |
Civil Appeals Nos. 70 to 73, 134 and 135 of 1973 |
| Decision Date |
Jun 04, 1986 |
| Hearing Date |
|
| Decision |
The Supreme Court of Pakistan dismissed the appeals, affirming the decision of the Lahore High Court regarding the interpretation of Section 15-BB of the Income-tax Act. The court held that the income from dividends declared out of the profits of a company enjoying a tax-holiday under Section 15-BB is exempt from tax in the hands of the shareholders. The court referenced a previous ruling in Commissioner of Income-tax, Punjab, N.W.F.P. and Bahawalpur v. Mrs. E.V. Miller P L D 1959 SC 219, reinforcing the legal principle that the distribution of tax-exempt income does not trigger tax liability for shareholders. The decision clarified the scope of tax exemptions applicable to shareholders receiving dividends from exempted companies, establishing a precedent for similar future cases. |
| Summary |
This case involves the interpretation of Section 15-BB of the Income-tax Act (XI of 1922) concerning tax exemptions for companies and their shareholders. The Supreme Court addressed whether dividend income from a tax-exempt company is also exempt from tax for its shareholders. The court examined a previous ruling and concluded that such income remains exempt, thereby protecting shareholders from tax liability on dividends. This landmark decision provides clarity on tax holiday provisions and their implications for shareholders, establishing an important legal precedent in tax law and corporate finance. Key takeaways from the case include the significance of tax exemptions, the interpretation of income tax laws, and the implications for shareholders in tax-exempt companies. Legal practitioners, tax advisors, and corporate entities should closely analyze this ruling for its impacts on future taxation matters. |
| Court |
Supreme Court of Pakistan
|
| Entities Involved |
Not available
|
| Judges |
MUHAMMAD HALEEM, C.J.,
S.A. NUSRAT,
ALI HUSSAIN QAZILBASH,
MIAN BURHANUDDIN KHAN, JJ
|
| Lawyers |
M. Ilyas Khan, Advocate Supreme Court,
Ch. Akhtar Ali, Advocate-on-Record,
Raza Kazimi, Advocate Supreme Court,
Muhammad Afzal Siddiqi, Advocate-on-Record,
Maqbool A. Qadri, Advocate-on-Record
|
| Petitioners |
COMMISSIONER OF Income Tax and others
|
| Respondents |
Mst. SURRIYA FAROOQ and others
|
| Citations |
1987 SLD 469,
1987 SCMR 1297
|
| Other Citations |
P L D 1959 SC 219
|
| Laws Involved |
Income-tax Act (XI of 1922),
Constitution of Pakistan (1973)
|
| Sections |
15-BB,
185(3)
|