Supreme Court Upholds Bushra Etezaz Ahsan’s Wealth Tax Exemption on Islamabad House

ISLAMABAD: The Supreme Court has upheld the Lahore High Court’s decision and granted Bushra Etezaz Ahsan a tax exemption. In a majority verdict, the court said that marriage does not merge the separate assets of husband and wife.

According to the ruling, a husband and wife are both independent taxpayers and each is entitled to an exemption on their own separate property. The majority judgment clarified that Bushra Etezaz Ahsan may claim an exemption on her property in Islamabad, while her husband may claim one separately on his property in Lahore. The court said that the husband’s exemption on the Lahore house does not cancel the wife’s exemption on the Islamabad house. It further held that there is no legal justification for interfering with the Lahore High Court’s order.

According to the Supreme Court, Bushra Etezaz Ahsan bought a residential house in Sector F-6/3, Islamabad, on 13 May 1996. She claimed exemption on the house under the Wealth Tax Act, 1963. However, the assessing officer rejected her exemption application on 29 May 2006 and issued a tax notice.

Tax authorities argued that Etezaz Ahsan had already obtained an exemption on the house in Zaman Park, Lahore, and that the same couple could not receive the benefit again on a second property. The Commissioner of Income Tax and the Income Tax Appellate Tribunal had also upheld the assessing officer’s decision.

The Lahore High Court later, on 28 October 2019, set aside all three departmental decisions and ruled in Bushra Etezaz’s favour. The Commissioner of Inland Revenue had filed appeals against that judgment in the Supreme Court, and these have now been disposed of along with the present ruling.

Justice Muhammad Shafi Siddiqui dissented from the majority verdict and wrote a detailed dissenting note. He said that under the Wealth Tax Act, a husband and wife together can receive an exemption on only one house. In his view, the wording of the law supports that interpretation.