VS, 2010 PTD-INCOME-TAX-APPELLATE-TRIBUNAL-PAKISTAN 89 (2009)

Income Tax Ordinance (XLIX of 2001)---

----Ss.38, 131 & 221---Income Tax Ordinance (XXXXI of 1979), S.80-D---Rectification of mistake---Appeal to Appellate Tribunal---Appellant/department through two appeals had impugned the consolidated order of Commissioner Income Tax (Appeals)---Commissioner Income Tax (Appeals), had deleted additions under S.80-D of (repealed) Income Tax Ordinance, 1979 on the gain on sale of land and it had been observed that S.80-D of (repealed) Income Tax Ordinance, 1979, had clearly stated that where no tax was payable by the company, then minimum tax payable would be 5% of the turnover of assessee--Since the tax payable by the assessee under S.80-CC of (repealed) Income Tax Ordinance, 1979 was lower than the tax worked out at 5% of the turnover of the assessee, tax under S.80-D of (repealed) Income Tax Ordinance, 1979 was charged in the original assessment under S.62 of (repealed) Income Tax Ordinance, 1979, but the Taxation Officer without any justification had rectified the order under S.221 of Income Tax Ordinance, 2001, despite the fact that for the assessment year 2002-2003 the assessee's contention in that regard had already been accepted by the Taxation Officer---Commissioner, Income Tax (Appeals), in circumstances had rightly held that tax under S.80-D of (repealed) Income Tax Ordinance, 1979 would be chargeable as had been charged in the original assessment under S.62 of said Ordinance---Appellate Tribunal had already held that the gain on the disposal of land was a capital gain not chargeable to tax---Tax under S.80-D of (repealed) Income Tax Ordinance, 1979 was chargeable on the turnover of the assessee and not on capital gains as it did not form a part of turnover---Commissioner Income Tax (Appeals) in circumstances had rightly deleted the tax, under S.80-D imposed on gain of sale of land.

Sabiha Mujahid, D.R. for Appellant.

Yousaf Saeed, F.C.A.' for Respondent.

ORDER

The department through these two appeals has objected to the consolidated impugned order of the learned CIT(A), dated 22-2-2007 for the assessment years 1999-2000 and 2000-2001 on the following common grounds:--

"That the learned Commissioner of Income Tax (Appeals) was not justified to order that the tax under section 80-D shall be chargeable whereas the separate tax under sections 80-CC and 80D was levied in accordance with the provisions of law and as per facts and in the circumstances of the instant case."

We have heard the learned representatives from both the sides and have also perused the impugned order of the learned CIT(A), both the assessment orders and other relevant record of the case.

We have found that the learned CIT(A) has deleted the additions under section 80-D on the gain on sate of land placing reliance on the decision of this Tribunal regarding chargeability of tax under section 80D or 80CC of .the repealed Income Tax Ordinance, 1979. It has been observed that section 80-D of the late Ordinance clearly states that where no tax is payable by the company then minimum tax payable would be 5% of the turnover of the assessee. Since the tax payable by the assessee under section 8000 was lower than the tax worked out at 5% of the turnover of the appellant, tax under section 80D was charged in the original assessment under section 62 but the Taxation Officer without any justification has rectified the order under section 221 of the Income Tax Ordinance, 2001. Despite the fact that for the assessment year 2002-2003 the assessee's contention in this regard has already been accepted by the Taxation Officer. We are therefore of the view that the learned CIT(A) has rightly held that tax under section 80D shall be charged as has been charged in the original assessment under section 62 of the repealed Ordinance, 1979. As far as the charging of tax under section 80D on the capital gains declared by the assessee on the sale of land is concerned, in this regard the Tribunal has already held that the gain on the disposal of land was a capital gain not chargeable to tax. The tax under section 80-D is chargeable on the, turnover of the assessee and not on capital gains as it does not form a part of the turnover. The learned CIT(A) has therefore rightly deleted the tax under section 80D imposed on the gain of sale of land for both the years under review.

Both the appeals filed by the appellant/department in view of the above facts and legal position are dismissed.

H.B.T./155/Tax (Trib.)Appeals dismissed.