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CUPOLA PAKISTAN LIMITED vs DEPUTY COMMISSIONER OF INCOME TAX Ss — 2026 PTD 216 KARACHI-HIGH-COURT-SINDH

Case information

Citation
2026 PTD 216 KARACHI-HIGH-COURT-SINDH
Court
Sindh High Court
Year
2026
Reporter
PTD
Parties
CUPOLA PAKISTAN LIMITED vs DEPUTY COMMISSIONER OF INCOME TAX Ss
Subject matter
Criminal
Provisions referred to
S. 2; S. 35; 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

CUPOLA PAKISTAN LIMITED VS DEPUTY COMMISSIONER OF INCOME TAX Ss.2(11), 2(24) & 35---Expense incurred prior to generation of revenue by taxpayer---Deductibility---Carry forward losses---Set off against the profits---Scope---Appellant / company filed returns (for the assessment year 1997-98) demonstrating to have incurred expenses in order to conduct its business, however, the carry forward was denied on the premise that the assessee had not done any business activity---Appellant's plea to carry forward losses was denied / disallowed upto Income Tax Appellate Tribunal on the ground that all the expenses claimed were pre-operational in nature---Validity---Plain reading of the term "business", as defined in S. 2(11) of Income Tax Ordinance, 1979 ('the Ordinance 1979'), demonstrated the expanse of the ambit thereof---There was abundant authority from Commonwealth jurisdictions amplifying its scope---In the present case, the nature of expense incurred was not in dispute; it was also not denied that the expense were relevant to the business of the appellant; and finally, there was no cavil to the proposition that such a loss is ordinarily permissible to be carried forward per plain reading of S. 35 of the Ordinance, 1979---The only issue was that such expense was incurred prior to generation of revenue by the appellant, however, the same could not be employed to deny the appellant of the benefit claimed---Therefore, the questions framed for determination were answered in affirmative i.e. in favour of the appellant and against the respondent/department---Appeal, filed by taxpayer, was allowed.

Other judgments reported in 2026 PTD

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