COMMISSIONER OF INCOME TAX, ZONE "A" KARACHI vs Messrs COMBINED INVESTMENT (PVT) LTD and 5 others
This matter concerns an appeal by the Commissioner of Income Tax regarding the retrospective application of income tax on deemed interest. The core legal question was whether the Department could charge income tax on deemed interest retrospectively or if it should be applied from a specific date. During the proceedings, counsel for the appellants clarified that the Department intended to charge income tax on the deemed interest effective from 1st July, 1976, pursuant to Explanation-8 to Section 4(1) of the Repealed Income Tax Act, 1922. Counsel for the respondents expressed no objection to this proposed application date. Consequently, the Supreme Court disposed of the appeals based on the statement made by the appellants' counsel, holding that the tax on the interest of the loan would be charged by the Department from the respondent effective from 1st July, 1976. This decision establishes that the tax liability in question is limited to the period commencing from 1st July, 1976, rather than being applied retrospectively prior to that date.
- From what date is income tax on deemed interest chargeable under Explanation-8 to Section 4(1) of the Repealed Income Tax Act 1922?
- Can the Department charge income tax on deemed interest retrospectively prior to 1st July 1976?
- Section 4(1), Repealed Income Tax Act 1922
ORDER
IFTIKHAR MUHAMMAD CHAUDHRY, C.J.---Learned counsel appearing for the appellants contended that the Department had not charged income tax on the deeming interest retrospectively but with effect from 1st July, 1976 as it has been provided in the Explanation-8 to section 4(1) of the Repealed Income Tax Act, 1922, therefore, instead of dilating upon other points of the case, the appeals may be disposed of with the observation that the tax will be charged by the Department from the respondent with effect from 1st July, 1976 on the interest of loan.
2. Mr. Iqbal Salman Pasha, learned counsel appearing for respondent in Civil Appeals Nos. 1443 and 1446 of 1996 had no objection if the appeals are disposed of in these terms. , the appeals are disposed of in view of the statement so made by the learned counsel for the appellants. No order as to costs.