| Case ID |
d7ae9400-6519-4d01-89ad-4927795e4e9f |
| Body |
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| Case Number |
I.T.A. Nos. 108/KB and 247/KB of 2011 |
| Decision Date |
Oct 08, 2012 |
| Hearing Date |
Jun 12, 2012 |
| Decision |
The Income Tax Appellate Tribunal ruled that the taxpayer's claim of exemption of capital gain under Rule 6A of the Fourth Schedule to the Income Tax Ordinance, 2001 was rejected. The Tribunal found that the transactions conducted by the taxpayer were not capital gains but rather appreciation of investments, which were taxable. The appeal of the taxpayer was dismissed, affirming the findings of the assessing officer and the first appellate authority. The Tribunal emphasized that the provisions specific to insurance companies under Section 99 and the Fourth Schedule of the Income Tax Ordinance should be applied, excluding general provisions that do not apply to insurance businesses. |
| Summary |
In the case concerning Messrs IGI Insurance Limited, the Income Tax Appellate Tribunal addressed significant issues related to the taxation of capital gains and the interpretation of the Income Tax Ordinance, 2001. The tribunal ruled that the taxpayer's transactions involving the sale and repurchase of shares were not capital gains but rather appreciation of investments, leading to tax liability. The case highlighted the complexities of tax law as it relates to insurance businesses, particularly the application of specific provisions of the Income Tax Ordinance. The ruling emphasized that the special provisions applicable to insurance companies under Section 99 and the Fourth Schedule must be followed strictly, as general provisions cannot override these specific regulations. This case serves as a critical reference for understanding tax treatment in the insurance sector and the implications of tax avoidance strategies. The decision has implications for tax compliance and the interpretation of capital gains within the insurance industry. |
| Court |
Income Tax Appellate Tribunal
|
| Entities Involved |
Taxpayer,
Messrs IGI Insurance Limited,
C.I.R.
|
| Judges |
Syed Muhammad,
Jamil Raza Zaidi,
Zarina N. Zaidi
|
| Lawyers |
Arshad Siraj,
Shabbar Zaidi,
Amjad Javed Hashmi
|
| Petitioners |
Messrs IGI Insurance Limited
|
| Respondents |
C.I.R., Audit Division II, L.T.U., Karachi
|
| Citations |
2013 SLD 9,
(2013) 107 TAX 96,
2013 PTD 116
|
| Other Citations |
2011 PTD 2042,
PLD 1981 SC 293,
1993 SCMR 1232,
1997 PTD 1693,
CIT v. Mercantile Fire and Central Insurance Co., Ltd. 1989 PTD 142
|
| Laws Involved |
Income Tax Ordinance, 2001
|
| Sections |
109(1)(a),
99,
67,
177,
122(1),
122(5)
|