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Contractors can be taxed individually, not jointly: Peshawar High Court

PESHAWAR (May 22 2004): A division bench of Peshawar High Court (PHC) has dismissed two appeals filed by Income Tax Department against Ghazi Barotha contractors (GBCs) and upheld the order of the Income Tax Tribunal.

The legal question which required consideration was: if income in the hands of GBCs was to be taxed collectively or possessed by individual companies, and whether GBCs were liable to be taxed on net income basis or presumptive tax basis.

The GBCs were represented by Wasim Sajjad, Latif Yousafzai, Ali Sajjad, Yusuf Khoso and assisted by Anjum Asim Shahid Rehman, Chartered Accountants.

Wasim Sajjad and Ali Sajjad argued that the provisions of Income Tax Ordinance prevented the department from taxing the joint venture collectively. They further submitted that the double taxation treaty also bound the department.

The bench, headed by Justice Nasir-ul-Mulk, agreed with the petitioners and held that income was to be taxed individually, and not collectively.

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