| Case ID |
d75d582c-a3ae-4780-9440-896ab2fcbf2b |
| Body |
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| Case Number |
I. T, C. No. 55 of 1971 |
| Decision Date |
Feb 10, 1982 |
| Hearing Date |
|
| Decision |
The court upheld the decision of the Income-tax Appellate Tribunal, allowing the set-off of losses from the banking business against income from interest on securities and dividends. The court found that the losses sustained by the assessee in previous years could be set off against the current income as the shares and securities were held as trading assets. This decision was based on interpretations of the Income Tax Act, particularly section 24(2), which allows for such set-offs under specific conditions. The ruling clarified the rights of the assessee to utilize past losses effectively against current profits derived from trading assets, reinforcing the principles of tax equity and fairness. |
| Summary |
This case revolves around the Income Tax Act, 1922, specifically focusing on section 24 provisions regarding the set-off of losses. The Sindh High Court examined whether losses from a banking business could be offset against income from securities and dividends. The ruling emphasized the importance of recognizing trading assets in tax assessments. By allowing the set-off, the court reinforced taxpayer rights and clarified how trading assets are treated under the law. This case is significant for tax professionals and businesses engaging in banking and financial activities, as it provides a clear precedent on how losses can be utilized in tax calculations. The decision is likely to influence future assessments and interpretations of the Income Tax Act, making it a pivotal point of reference for similar cases in the financial sector. |
| Court |
Sindh High Court
|
| Entities Involved |
|
| Judges |
Naimuddin,
Fakhruddin H. Shaikh
|
| Lawyers |
Nasarullah Awan,
Muhammad Hanif Khan
|
| Petitioners |
COMMISSIONER OF INCOME TAX, CENTRAL, KARACHI
|
| Respondents |
MESSES EASTERN BANK LTD.
|
| Citations |
1982 SLD 101,
1982 PLD 680
|
| Other Citations |
Commissioner of Income-tax, Andhra Pradesh v. Cocanada Radhaswanni Bank Ltd. (1965) 57 ITR 306,
Rais Pir Ahmad Khan v. Commissioner of Income-tax. Lahore Zone, Lahore (1975) 32 Tax. 22,
Messrs Sainrapt and Et. Brice, Karachi v. The Commissioner of Income-tax (West), Karachi PLD 1979 Kar. 591,
Western States Trading Company Ltd. v. Commissioner of Income-tax Central, Calcutta (1971) 80 ITR 21
|
| Laws Involved |
Income Tax Act, 1922
|
| Sections |
24,
24(2)
|