| Case ID |
e32c7734-b094-473e-b66b-e39902482aab |
| Body |
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| Case Number |
Civil Appeals Nos. 1357 of 1999, 916-918, 1069, 10 |
| Decision Date |
May 18, 2004 |
| Hearing Date |
May 17, 2004 |
| Decision |
The appeals were dismissed by the Supreme Court of Pakistan, confirming the earlier decisions made by the Lahore High Court and the Income Tax Appellate Tribunal. The Court held that the interest earned on share capital deposited in banks by the appellants was classified as income from other sources and therefore, not entitled to exemption under the relevant provisions of the Income Tax Ordinance, 1979. The Court also emphasized that the exemption under Section 80-B does not apply to public limited companies, and the appellants failed to demonstrate that the interest income was derived directly from their electric power generation activities. |
| Summary |
In the case of GENERTECH PAKISTAN LTD. versus INCOME TAX APPELLATE TRIBUNAL OF PAKISTAN, the Supreme Court of Pakistan addressed the tax implications of interest earned on share capital deposits. The appellants, electric power generating companies, sought exemption from income tax on interest accrued from bank deposits of their share capital. The Court ruled that such interest is classified as income from other sources, not qualifying for exemption. The ruling clarified that public limited companies do not benefit from the exemptions under Section 80-B of the Income Tax Ordinance. The decision reaffirms the strict interpretation of tax laws concerning the classification of income and the eligibility for exemptions, emphasizing the importance of the source of income in tax assessments. This case underscores the need for electric power companies to understand their tax obligations and the limits of available exemptions under Pakistani tax law. |
| Court |
Supreme Court of Pakistan
|
| Entities Involved |
GENERTECH PAKISTAN LTD.,
INCOME TAX APPELLATE TRIBUNAL OF PAKISTAN
|
| Judges |
Iftikhar Muhammad Chaudhry,
Rana Bhagwandas,
Khalil-ur-Rehman Ramday
|
| Lawyers |
Raja Muhammad Akram, Sr. ASC,
Mr. Ejaz Muhammad Khan, AOR,
Mr. M.A Qureshi, AOR,
Mr. Muhammad Ilyas Khan, Sr. ASC,
Mr. Mehmood-ul-Islam, AOR,
Mr. Muhammad Aslam Chatha, AOR,
Malik Muhammad Nawaz, ASC,
Raja Abdul Ghafoor, AOR
|
| Petitioners |
Others,
GENERTECH PAKISTAN LTD.
|
| Respondents |
Others,
INCOME TAX APPELLATE TRIBUNAL OF PAKISTAN
|
| Citations |
2004 SLD 3225 = 2004 PLJ 618
|
| Other Citations |
1993 SCMR 1224
|
| Laws Involved |
Income Tax Ordinance, 1979
|
| Sections |
80-B(2),
30
|