COMMISSIONER INLAND REVENUE vs MUHAMMAD OSMAN GUL S — 2024 PTD 889 LAHORE-HIGH-COURT-LAHORE

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COMMISSIONER INLAND REVENUE VS MUHAMMAD OSMAN GUL S.7E---Constitution of Pakistan, Art. 25, Fourth Sched. Federal Legislative List, Entries 47 & 50---Intra Court Appeal---Capital Value of Assets, taxing of---Vires---Discrimination---Authorities were aggrieved of judgment passed by Judge in Chambers of High Court declaring provision of S. 7E of Income Tax Ordinance, 2001, ultra vires the Constitution---Validity---Provision of S. 7E of Income Tax Ordinance, 2001, treats increment in value of capital asset as income and resident person cannot be left immersed in the thought of deriving double benefit viz one increase in value of his capital asset and two zero tax---In case an owner of property disposes of his asset, no tax is leviable under S. 7E of Income Tax Ordinance, 2001---But beyond six years, he does not pay capital gain tax on such sale, too---Such tax has been levied on notional income but not a notional asset (from which it is deemed to arise)---Legislature has intended to tax an asset apparently lying dormant and not generating an income in cash but indeed capable of increment in value---It is the value addition that S.7E of Income Tax Ordinance, 2001, seeks to tax---Notionally the augmentation in value becomes part of taxpayer's income---Provision of S. 7E (2)(d)(i) to (iv) of Income Tax Ordinance, 2001, does not suffer from vice of discriminatory legislation and does not offend Art.25 of the Constitution---Categories of persons have been carved out in S. 7E (2)(d)(i) to (iv) of Income Tax Ordinance, 2001, which are distinct and apart from general category of taxpayers---Legislature is empowered to create categories of taxpayers and to tax one and not the other---Division Bench of High Court in exercise of appellant jurisdiction set aside judgment passed by Judge in Chambers of High Court---Intra Court Appeal was allowed, in circumstances.

COMMISSIONER INLAND REVENUE vs MUHAMMAD OSMAN GUL S — 2024 PTD 889 LAHORE-HIGH-COURT-LAHORE

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