SC upholds MCB win over Inland Revenue pension appeal
A Supreme Court decision on pension fund accounts says tax on pension surplus hits a bank only when surplus cash is repaid to the employer, not when auditors book a paper gain.
The top court said a pension fund surplus is not a bank’s taxable income until it is repaid to the employer.
Justice Aqeel Ahmed Abbasi wrote the ruling; Justices Irfan Saadat Khan and Shakeel Ahmed sat with him.
The bench dismissed the Commissioner Inland Revenue’s appeal against MCB Bank and left the Lahore High Court order intact.
Booked IAS 19 actuarial gains do not create tax by themselves; the Income Tax Ordinance, 2001, controls liability.