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Business Recorder
13-06-2025
- Business
- Business Recorder
IHC ruling favours FBR: Leading telecom co to pay Rs22bn
ISLAMABAD: The Islamabad High Court (IHC) has issued a judgement against a leading telecom operator, which would result in payment of Rs22 billion (US$78 million) to the Federal Board of Revenue (FBR). In this regard, a Division Bench of the Islamabad High Court, led by Justice Babar Sattar, has delivered a significant ruling in favor of revenue in a tax reference filed by a major Telecom operator. This ruling upholds the powers and jurisdiction of the Federal Board of Revenue (FBR) in assessing tax liability on a high-value intra-group transaction involving the transfer of Telecom Operator's tower assets. As a result, the Telecom Operator is now liable to pay taxes amounting to approximately Rs. 22 billion (USD 78 million) on its gain from the transaction. The landmark case focused on 2018 internal asset reorganization, where the Telecom Operator transferred its nationwide tower infrastructure to its wholly owned subsidiary. The disposal of these assets for Rs. 98.5 billion (USD 940 million) by the Telecom Operator was recorded in its financial statements as an accounting gain of approximately Rs. 75.9 billion. However, the Telecom Operator contended that the transaction was not taxable because the asset was disposed of to its wholly owned subsidiary, according to section 97(1) of the Income Tax Ordinance, 2001 (ITO) concerning intra-group transfers. The high court dismissed the petitioner's argument, stating that the provision permits a tax-neutral event only if all conditions of section 97 of the ITO are met. This includes ensuring that the written-down value of the transferred asset remains unchanged in the hands of the transferee compared to the transferor, meaning the transaction should not generate any economic value leading to taxable income. The Court determined that the transaction was conducted at a fair market value of USD 940 million, accepted by the petitioner as consideration, thereby violating section 97 of the ITO. Consequently, the Court concluded that the gain from the transaction was clearly a taxable event since nothing remained to defer taxation to a later date. Additionally, the Court ruled that the Commissioner had the authority to consider accounting income when evaluating taxable income. This remarkable success of the FBR on judicial front is another step toward accomplishment of vision of the Hon'ble Prime Minister for expeditious liquidation of state revenue involved in the cases pending before the various appellate fora. Under the guidance of Rashid Mehmood, Chairman, FBR, Legal Wing of the FBR headed by Mir Badshah Khan Wazir, Member (Legal IR) in association with Director General (Law) has already taken a number of initiatives to actively pursue the pending cases by providing proper assistance to the courts. These collective efforts have resulted in resolution of large number of pending tax disputes at various legal fora involving revenue in billions of rupees. Asma Hamid, ASC, and Dr. Ishtiaq Ahmed Khan (DG Law) effectively represented the Federal Board of Revenue in this case. While dismissing another petition of the same telecom operator filed against a show cause notice issued under the Federal Excise Act, 2005, the court-imposed cost of Rs. 100,000 upon the petitioner to be paid to Deputy Commissioner-IR, LTO, Islamabad within four weeks. Copyright Business Recorder, 2025
Express Tribune
12-06-2025
- Business
- Express Tribune
IHC rules telecom's tower deal taxable
At high tax rates, profit margins for sellers decrease, leaving them with options to pass on the burden to consumers, compromise on the quality of products, evade taxes or find cheaper illicit goods. photo: file A Division Bench of the Islamabad High Court (IHC), led by Justice Babar Sattar, has recently delivered a significant ruling in favour of revenue in a tax reference filed by a major telecom operator. The ruling upholds the powers and jurisdiction of the Federal Board of Revenue (FBR) in assessing tax liability on a high-value intra-group transaction involving the transfer of telecom operator's tower assets. As a result, the telecom operator is now liable to pay taxes amounting to approximately Rs22 billion ($78 million) on its gain from the transaction. The landmark case focused on a 2018 internal asset reorganisation, where the Telecom Operator transferred its nationwide tower infrastructure to its wholly owned subsidiary. The disposal of these assets for Rs98.5b ($940m) by the telecom operator was recorded in its financial statements as an accounting gain of approximately Rs75.9b. However, the telecom operator contended that the transaction was not taxable because the asset was disposed of to its wholly owned subsidiary, according to section 97(1) of the Income Tax Ordinance, 2001 (ITO) concerning intra-group transfers. The IHC dismissed the petitioner's argument, stating that the provision permits a tax-neutral event only if all conditions of section 97 of the ITO are met. This includes ensuring that the written-down value of the transferred asset remains unchanged in the hands of the transferee compared to the transferor, meaning the transaction should not generate any economic value leading to taxable income. The Court determined that the transaction was conducted at a fair market value of USD 940 million, accepted by the petitioner as consideration, thereby violating section 97 of the ITO. Consequently, the court concluded that the gain from the transaction was clearly a taxable event since nothing remained to defer taxation to a later date. Additionally, the Court ruled that the Commissioner had the authority to consider accounting income when evaluating taxable income. This remarkable success of the FBR on judicial front is another step toward accomplishment of vision of the Hon'ble Prime Minister for expeditious liquidation of state revenue involved in the cases pending before the various appellate fora. Under the guidance of Rashid Mehmood, Chairman of the FBR, Legal Wing of the FBR headed by Mir Badshah Khan Wazir, Member (Legal IR) in association with Director General (Law) has already taken a number of initiatives to actively pursue the pending cases by providing proper assistance to the courts.
Business Recorder
07-06-2025
- Politics
- Business Recorder
Amendments to orders for accuracy: Commissioner IR has powers under Sec 221(1) of IT law: SC
ISLAMABAD: The Supreme Court ruled that the Commissioner Inland Revenue has jurisdiction under Section 221(1) of Income Tax Ordinance, 2001 to amend the orders by rectifying any mistake apparent from the record. The 24-page judgment, authored by Justice Munib Akhtar, set aside the impugned judgments of the Lahore High Court (LHC) and the Islamabad High Court (IHC). It held; 'the tax references out of which these matters arise shall be deemed pending in the respective High Courts and the questions of law raised therein decided in accordance with law and consistently with this judgment.' Section 122 (5A) ITO: Power granted to IR commissioners is not without boundaries: ATIR 'CPLA 431-L/2023 involves questions of law other than the one decided by this judgment. This leave petition is returned to the office to be fixed in the ordinary course before an appropriate Bench,' it also said. A three-judge bench, headed by Justice Munib Akhtar, and comprising Justice Ayesha A Malik and Justice Shahid Waheed heard the department (FBR) petitions against the LHC and IHC decisions. Babar Bilal appeared in CPLA Nos.4583 to 4585/2023. The judgment noted that the matters relating to the deemed assessment order (and indeed, the deemed amended assessment order) fall only and always within the first part (of Mehreen Zaibun Nisa), with all ensuing 'inevitable corollaries' applying accordingly. One of these is that the deemed orders of both kinds must be regarded as orders 'passed' by the Commissioner within the meaning, and for the purposes of, Section 221(1). 'The Commissioner therefore has the jurisdiction to amend the orders by rectifying any mistake apparent from the record'. The judgment decided the question; 'Whether the Commissioner has jurisdiction under subsection (1) of Section 221 of the 2001 Ordinance to amend, in exercise of the power thereby conferred and, in the manner, and to the extent therein stated, what is known as a deemed assessment order under s. 120 to rectify a mistake apparent from the record?', in favour of the Commissioner and against the taxpayers. The High Courts had answered the question in the negative. The Department urged that both the courts erred materially in this regard. The taxpayers pray that the impugned judgments be upheld as having reached the correct conclusion in law. The judgment confirmed that the error made by the High Courts was to conflate the two deeming provisions into one. It was on account of this mistake that both judgments, whose reasoning run in parallel, concluded that there was no application of mind by the Commissioner and that the mistake always lay where, and by whom, in fact made, i.e., the taxpayer. However, once this unfortunate fusing is unpacked, and what the subsection actually does and require is realized, the mistake becomes apparent. Had the subsection only contained the deeming required by clause (b), then there could be merit to what the learned High Courts concluded. In such a situation, the only 'state of affairs' required to be imagined would be the deemed issuance of an assessment order. It could perhaps then be said that the deeming did not reach or touch any mistake to be found as a matter of fact in the return, and hence the deemed assessment order did not deal with any such thing. In this situation the attribution of the mistake, being outside the scope (or beyond the limit) of the legal fiction could be said to lie where, and by whom, actually made as a matter of fact. But that of course is not the case. There is also the (precedent) deeming required by clause (a). Once that is kept in mind then the inevitable conclusion is that there was, as a matter of law, a (deemed) application of mind by the Commissioner. Since it operated (as it could only) on the return, an inevitable corollary is that it is the whole of it, mistakes and all, that is the assessment (deemed) to have been made. And it is the (deemed) assessment so made that then results in the (deemed) issuance of the assessment order. In our view, it is only in terms of this bifurcation that subsection (1) can be properly understood and applied. A rolling up of the two clauses into one, with respect, led to the error into which both the learned High Courts fell. Thus, in the principal LHC judgment much emphasis was placed on s. 221(1) requiring that the order be 'passed' by the Commissioner. The matters before the Supreme Court arose under the Income Tax Ordinance, 2001 in relation to the jurisdiction, under subsection (1) of Section 221, of the Commissioner to rectify any mistake apparent on the face of the record and thereby amend what is known as a deemed assessment order under s. Most of these matters come from the Lahore High Court, where the principal judgment is dated 27.04.2022. That decision disposed of eight tax references that had been filed by the Commissioner and was followed in all the other matters in the said High Court by various orders of different dates. Islamabad High Court, where the principal judgment is dated 20.09.2023 which disposed of tax references filed by the Department. Both High Courts reached the same conclusion on the question now before the Court and therefore, all these matters were heard together and are being decided by this judgment. Copyright Business Recorder, 2025
India Gazette
06-06-2025
- India Gazette
Fire breaks out at revenue building in ITO Office, quickly brought under control
ANI 06 Jun 2025, 11:36 GMT+10 New Delhi [India], June 6 (ANI): Fire broke out at the Revenue building, ITO office in Room no 238. The fire department received a call at 9.57 am, and it was doused in 10 minutes. Fire was in a room. DFS has sent 6 fire tenders. Fire is under control. More information is awaited. Earlier on June 2, a massive fire broke out in two buses on Pankha Road in the Janakpuri area of Delhi on Thursday, said the Delhi fire service officials. In a separate incident, on Monday, a fire broke out in four to five jhuggis following a cylinder blast in the Wazirpur Industrial to the Delhi Fire Services, 'The fire broke out in 4-5 jhuggis due to a cylinder blast in Wazirpur Industrial area. One woman was injured and was admitted to a hospital.' The Fire Services said that two fire tenders reached the spot and the blaze was controlled. In a separate incident, on May 31, a massive fire was reported at the Sunday Bazar in Budh Vihar Phase 2 of New Delhi, according to officials, and two to four fire tenders rushed to the incident spot. The fire was in 10 to 12 huts, which the fire officials completely doused. The reason behind the accident is yet to be revealed. No casualties have been reported. Earlier, two people lost their lives and four others were injured in a fire at an E-Rikshaw charging station at Moti Ram Road, in the national capital's Shahdara area. (ANI)
NZ Herald
29-05-2025
- General
- NZ Herald
Stratford High School sets up school farm, students flock to learn farm management
The course covers Years 9 to 13. The intake was 'slightly more boy-heavy', but there had been 'good interest from our girls as well', Stone said. Two-thirds of Stratford's school leavers choose work placements over university, and they were keen to get practical experience. The school offered 'full farm management', and the business side would come later, he said. 'But for our Year 9s and 10s, and even Year 11s, it's more about that understanding of soil, pasture management, animal husbandry, farm management, spraying, and in time we will be looking to do our own hay as well. 'It's all about that side of farming and understanding what farm management is ... 'As they get older, and the standards are more designed for the business end of things, then the older students will look at that.' How hands-on does it get? 'Well, if you think about what happens on a normal farm, we run the same process. 'Our ewes are in lamb at the moment, there's a ram with them, so come late August or early September, the whole lambing process will occur, and our students are a big part of that. 'There's obviously the shearing process, our ewes will need to be shorn, our lambs will be sold, and we're lucky to have sale yards down the road. 'So that whole process, whole cycle, can be seen by our students and they will be a part of it.' It was 'not part of the plan, at the moment' for students to cull or slaughter animals, he added. The programme was run by agriculture teacher Fiona Putt, who was also a drystock farmer. 'We are really lucky to have our own agriculture teacher, as many schools have to use their science teacher.' Stone said the school had a five-year plan to develop a two-pronged agriculture programme, with a practice-based unit standard course, 'with potentially the support of someone like Primary ITO [Industry Training Organisation]', as well as an NCEA-accredited achievement standard, where senior students learned about the business side of farming. 'We're looking to progress, as numbers grow, as interest grows, and as we learn more about running a farm as a school. 'It's not as easy as it sounds, and we may need to look at having a part-time farm manager on board as well.' Year 10 student Vinny Hunt said he always wanted to be a farmer. 'I don't really like sitting in a class, and this is more hands-on and I wanted to get out.' He was looking forward to shearing and lambing later in the year, and said he had already learned a lot. 'I've learned how to safely handle sheep and cattle, how to calculate pasture cover and how to fix a fence.' He also enjoyed mustering sheep. Stone said that, from June next year, the school would get back 17 hectares that are currently leased out. The farm could take on more stock and perhaps diversify into dairy. It could also lead to the introduction of different standard courses, such as learning to use quad bikes and tractors. The school had received 'amazing' support from the community in getting the farm up and running, Stone said. 'We've had parents who are involved, local organisations who have helped out, either through sponsorship or labour. 'It's been unbelievable, how many people have supported us, and we're incredibly grateful.' Looking further afield, Vinny said agriculture was his favourite subject, and it was giving him skills for the future. 'I want to become a dairy farmer or maybe even drystock, or become a contractor mowing fields.' - RNZ
