Commissioner Of Infcome Tax/Wealth Tax vs Sarhad Development Authority, Peshawar
This civil appeal before the Supreme Court of Pakistan arose from a judgment of the Peshawar High Court concerning the assessment of income tax on lease money. The core legal question was whether tax should be charged on the total lease money of each plot received in advance in the year of receipt, or whether it should be charged proportionately on each plot per year over the lease term. The Supreme Court observed that the High Court had relied on an inapplicable Indian precedent, which addressed a different legal issue. Consequently, with the mutual consent of the parties' counsel, the Supreme Court allowed the appeals, set aside the impugned judgment, and remanded the cases to the Peshawar High Court for a fresh decision in accordance with the law within six weeks.
- Whether income tax is to be charged on the total lease money of a plot received in advance in the year of receipt or proportionately over the lease term?
- Can a judgment relying on an inapplicable precedent addressing a different legal issue be sustained on appeal?
- Whether a case may be remanded for fresh decision when the lower court decides the matter based on an irrelevant precedent?
ORDER
1. IFTIKHAR MUHAMMAD CHAUDHRY, C.J. After hearing learned counsel we are of the opinion that learned High Court has relied upon the judgment in the case of K.S. Krishna Rao v. Commissioner of income tax, Andhra Pradesh (1991 PTD 286 Supreme Court of India, but the issue discussed therein is different from the issue involved in this case namely whether the Tax is to be charged on total lease money of each plot received in advance in the year in wich such lease money was received by the respondent or it is to be charged proportionately on each plot per year in respect of the plot leased out by the respondent etc. When we confronted learned counsel for parties with this distinction, they both agreed for remand of the cose to the learned Peshawar High Court, Peshawar for fresh decision of-the appeals in accordance with law after providing opportunity of hearing to all concerned.
2. IFTIKHAR MUHAMMAD CHAUDHRY, C.J. After hearing learned counsel we are of the opinion that learned High Court has relied upon the judgment in the case of K.S. Krishna Rao v. Commissioner of income tax, Andhra Pradesh (1991 PTD 286 Supreme Court of India, but the issue discussed therein is different from the issue involved in this case namely whether the Tax is to be charged on total lease money of each plot received in advance in the year in wich such lease money was received by the respondent or it is to be charged proportionately on each plot per year in respect of the plot leased out by the respondent etc. When we confronted learned counsel for parties with this distinction, they both agreed for remand of the cose to the learned Peshawar High Court, Peshawar for fresh decision of-the appeals in accordance with law after providing opportunity of hearing to all concerned.
3. Appeals are allowed, impugned judgment is set aside, cases are remanded to the Peshawar High Court, Peshawar for decision afresh in accordance with law after providing opportunity of hearing to all concerned within d period of six weeks after receipt hereof.