Legal Case Summary

Case Details
Case ID e312ab21-d3c3-40ca-891b-1d72a8567a63
Body View case body.
Case Number P.T.R. No. 177 of 2001
Decision Date Feb 25, 2002
Hearing Date
Decision The Lahore High Court dismissed the reference in limine, stating that the questions posed did not raise any substantive question of law or controversy. The court observed that the amounts added to the income of the firm as per the provisions of section 12(18) were actually capital contributions from the partners, which did not constitute a loan. The court emphasized that the issue of whether an amount introduced as capital was actually a loan was a question of fact, not law. Therefore, the addition of Rs. 3,60,000 to the firm's income was unjustified as the amount was never claimed as a loan. The reference was dismissed without further deliberation.
Summary In the case of P.T.R. No. 177 of 2001, the Lahore High Court addressed an appeal regarding the treatment of cash deposits in the accounts of a partnership firm. The Commissioner of Income Tax contended that certain amounts recorded as capital contributions should be considered as loans under the Income Tax Ordinance, specifically section 12(18). The Tribunal had previously ruled in favor of the firm, indicating that these amounts did not attract the provisions of the cited section. The High Court concurred with the Tribunal's view, stating that the determination of whether an amount was a loan or a capital contribution is fundamentally a question of fact. This case highlights the importance of accurately categorizing financial contributions within partnership accounts and the implications of such classifications under tax law. Key phrases include 'Income Tax Ordinance', 'capital contributions', 'loan classification', and 'Lahore High Court decision'.
Court Lahore High Court
Entities Involved Not available
Judges Naseem Sikandar, Muhammad Sair Ali
Lawyers Mian Yousaf Umar
Petitioners COMMISSIONER OF Income Tax/Wealth Tax, Faisalabad
Respondents Messrs Mohsin & Co, Rice Dealer, Lahore Road, Chiniot
Citations 2002 SLD 306, 2002 PTD 1858
Other Citations Not available
Laws Involved Income Tax Ordinance, 1979
Sections 12, 12(18), 136(1)