Islamabad: The Supreme Court of Pakistan has dismissed an appeal filed by Emaar DHA Islamabad Ltd regarding the taxation of agreements related to the sale of developed property, according to the Federal Board of Revenue (FBR) published case summary.
The court upheld the treatment of these agreements as long-term contracts under Section 36 of the Income Tax Ordinance, 2001. Under the percentage-of-completion method, income and related costs are recognised in accordance with the progress of development work.
According to the FBR summary, the judgment provides clarity on the tax treatment applicable to relevant development activities carried out before the introduction of Section 100D in 2020. The decision may serve as guidance for similar tax-related disputes involving property development activities.
The ruling relates to income tax matters of developers and does not determine the ownership status or legal validity of individual properties in DHA Islamabad.
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