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8 Billion Rupees Tax matter decided by Supreme Court of Pakistan

On 10th March 2020, the Honourable Supreme Court of Pakistan decided following Civil appeals with a joint order, in which more than Rs. 8 Billions Revenue was involved.

Mr. Irfan Mir Halepota, Advocate Supreme Court of Pakistan was representing the FBR, Federal Board of Revenue in these Civil Appeals.

Honourable Bench of Supreme Court of Pakistan ordered that After arguing the matter at some length, learned counsel for the parties and so also Mr. Masood Akhtar, The Chief Legal-1, Federal Board of Revenue (FBR), the petitioner, submit that the instant appeals be disposed off with an observation that the revenue authority may issue fresh notices, in respect of the demand in question, after giving reasons for initiating the process beyond the period prescribed for preserving the record, in terms of Section 174 of the Income Tax Ordinance, 2001, the notices shall disclose the amounts due, and if possible also indicate the names of the relevant parties. The entire exercise shall be concluded till 30th June, 20202. The respondents shall fully cooperate in the above endeavor of the revenue authority and shall not seek to delay the matter in any manner whatsoever. The appeals stands disposed off in the foregoing Terms.

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Property Law Real Estate Deals Tax

Property Valuation FBR State Bank of Pakistan

FBR Pakistan Tax Property ValuationThe Finance Bill 2016 an amendment to Section 68 of Income Tax Ordinance, 2001 had been proposed under which commissioner Inland Revenue had been empowered to reject the collector value of provincial government and appoint valuation committee to ascertain fair market value to determine the income tax.

The amendment seeks to determine fair market value of property without regard to value fixed or notified by any provincial authority for the purpose of stamp or for any other purpose.
Property of posh areas in big cities like Karachi, Lahore, Islamabad which disclosed that the declared value was much lower than the open market value thus causing huge monetary losses to national exchequer.
It is generally observed by the Government Authorities that Property business in big cities had become source of parking undeclared or black money.
The amendment is proposed to be effective from July 01, 2016 but the commissioner IR could able to determine the valuation of past six years as envisaged in the tax laws.
The existing Section 68 explains fair market value as:
(1) For the purposes of this Ordinance, the fair market value of any property or rent, asset, service, benefit or perquisite at a particular time shall be the price which the property or rent, asset, service, benefit or perquisite would ordinarily fetch on sale or supply in the open market at that time.
(2) The fair market value of any property 3[or rent], asset, service, benefit or perquisite shall be determined without regard to any restriction on transfer or to the fact that it is not otherwise convertible to cash.
(3) Where the price referred to in sub-section (1) is not ordinarily ascertainable, such price may be determined by the Commissioner.
Further Section 222 of the Ordinance authorized the commissioner to appoint expert. It said: “The commission may appoint any expert as the commission considers necessary for the purpose of the Ordinance for the purpose of audit of valuation.”

Irfan Mir Halepota, Advocate Supreme Court of Pakistan.