| Case ID |
f5a2a36a-c031-498c-be38-8903ac6e4916 |
| Body |
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| Case Number |
I.T.As. Nos.1050 to 1053/LB of 1986-87, 457 to 463 |
| Decision Date |
Mar 19, 1998 |
| Hearing Date |
|
| Decision |
The Appellate Tribunal Inland Revenue upheld the assessment of interest received by the Model Town Cooperative Society from the Lahore Development Authority on delayed payments as taxable income. The tribunal concluded that the interest payments were not capital receipts as they were not a result of any injury to the capital assets of the society. The tribunal maintained that the nature of the original transaction (sale of land) did not exempt the interest income from taxation. The tribunal dismissed appeals from the taxpayer regarding the taxability of this interest, emphasizing that it was a legitimate revenue receipt under the Income Tax Act, 1922. |
| Summary |
In the case concerning the Model Town Cooperative Society, the Appellate Tribunal Inland Revenue addressed the taxability of interest received due to delayed payments from the Lahore Development Authority (LDA) on the sale of land. The tribunal ruled that the interest payments, although arising from a capital transaction, were taxable as they did not constitute capital gains. The tribunal emphasized the distinction between revenue and capital receipts, clarifying that the interest received was akin to any other interest income and thus subject to taxation under the Income Tax Act, 1922. This decision is significant as it clarifies the treatment of interest payments in relation to capital transactions, reinforcing the principle that such payments are taxable as revenue. The case also highlighted procedural aspects regarding the filing of appeals and the importance of presenting original grounds before the tribunal. The ruling serves as a precedent for similar cases involving delayed interest payments and capital transactions, providing clarity in the interpretation of tax liabilities under prevailing laws. |
| Court |
Appellate Tribunal Inland Revenue
|
| Entities Involved |
Lahore Development Authority,
Model Town Cooperative Society
|
| Judges |
SHARIQ MAHMOOD, ACCOUNTANT MEMBER,
MUHAMMAD TAUQIR AFZAL MALIK, JUDICIAL MEMBER
|
| Lawyers |
Yousaf Ali Ch. I.T.P,
Iqbal Hashmi,
Rana Munir Hussain, L.A.
|
| Petitioners |
Yousaf Ali Ch. I.T.P,
Iqbal Hashmi
|
| Respondents |
Rana Munir Hussain
|
| Citations |
1998 SLD 304,
1998 PTD 2412,
(1998) 78 TAX 25
|
| Other Citations |
1995 PTD (Trib.) 329,
1998 PTD 1364,
1976 PTD 206 (H. C. Lahore),
1965 PTD 61 (SC India),
(1963) 50 ITR 867 (Madras H.C.),
CIT, Madras v. Govinda Rajulu Chetty,
Baharilal Bhargave v. CIT (Allahabad H.C.),
(1973) 87 ITR 666 Re: CIT, Kerala v. Per Yar and Pareekenni Rubbers Ltd. (Kerala High Court),
CIT v. Chintamani Saran Nath Shahdeo
|
| Laws Involved |
Income Tax Act, 1922
|
| Sections |
Not available
|