MODERN TEXTILE MILLS LIMITED vs COMMISSIONER INLAND REVENUE Ss — 2023 PTD 689 KARACHI-HIGH-COURT-SINDH

Case information

Citation: 2023 PTD 689 KARACHI-HIGH-COURT-SINDH
Court: Sindh High Court
Year: 2023
Reporter: PTD
Parties: MODERN TEXTILE MILLS LIMITED vs COMMISSIONER INLAND REVENUE Ss
Subject matter: Tax & Customs
Provisions referred to: S. 79; S. 122; Income Tax Ordinance

Fields are extracted from the reported citation and judgment text. Where a detail is not stated in the record, it is not shown.

Judgment text as reported

MODERN TEXTILE MILLS LIMITED VS COMMISSIONER INLAND REVENUE Ss.18, 79(1)(e), 122(4)(5a), 133 & 166(1)(a)---Reference---Tax exemption---'adventure in nature of trade'---Scope---Taxpayer was an industrial unit and sold its land by converting it into a housing scheme and earned profit---Validity---For an adventure in nature of trade there had to be "indicia of trade" which was present in transaction in question---Intention of a person in selling out any asset depended upon the conduct of that person and the circumstances of the case--- Manner and method in which land was sold out fell under adventure in the nature of trade and was taxable in the hands of company and was not exempted under S.79 of Income Tax Ordinance, 2001, as claimed by the tax payer---Earlier proceedings on same subject under S.122 (5) of Income Tax Ordinance, 2001, which were dropped, in those proceedings procedure through which the issue was probed during audit proceedings was not carried out by the department---Such was neither a case of change of opinion nor it was a past and closed transaction---all three authorities below i.e. Taxation Officer, Commissioner appeals and appellate Tribunal Inland Revenue were justified in reaching to the conclusion that exemption claimed by taxpayer under S.79(1)(e) of Income Tax Ordinance, 2001, was not applicable---Reference was dismissed, in circumstances.

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