2002 PLP (Trib (PTD)

The A.R. of the assessee has relied on PLD 1990 SC 68 and 1993 PTD

69. He has also placed a photo copy from Black's Law Dictionary in which the meaning or explanation of the word "gain" has been given. I very humbly say that all explanation given through Black's Law Dictionary as well as law are not relevant to this case. The first case cited as PLD 1990 SC 68 in which the original ratio of the case is Central Excises and Salt Act of 1944 and secondly the interpretation of statutes. In the second judgment i.e. 1993 PTD 69, the issue is sections 12(3) and 12(13). It is pertaining to income from house property even otherwise the point .in issue that whether lease money of an exempted unit is exempt from tax is a decided issue. Reference is made to the following. "I.T.A. No.361/LB of 1994, dated 2-8-1997 in the case Deputy Commissioner of Income-tax Circle-33, Multan v. Mian Sons Cotton Factory Sadiqabad. This is the latest order of Division Bench by the learned I.T.A.T. holding field at present in which the learned appellate forum has accepted the departmental view point that lease income does not fulfil the stringent conditions imposed by clause (118C) of Part-I of Second Schedule which is pari passu with clause (118-C). Though the said order has been challenged in the High Court but the A.R. for the assessee contends that it has not yet been decided, therefore, the order of the I.T.A.T. is presently in the field and applicable to the present case. As far as the above cited two judgments are concerned and the interpretation from the Black's Law Dictionary, the same has been discussed in detail by the CIT(A) which needs no rectification. The final decision of the CIT(A) is as below: "The upshot of the whole issue is whether lease income is part of the profits and gains derived from an industrial undertaking) contemplated in the provisions of clause (118A). The answer is~ clearly to be found in the negative as the lease income is specifically assessable under section 30 of the Income Tax l Ordinance and not section

22. I decline to interfere on the matter of refusal of exemption." The same is upheld and all the three appeals of the assessee are dismissed being without any merit. As far as the appeals of the Revenue are concerned, first of all I take up the appeal for the assessment year. 1995-96. The deletion of H machinery repairs add-back at Rs.14.500 is upheld as the same had been done in view of the expense having be incurred by the appellant for its own property for preserving the same by added precaution. As far as the ground of additional tax of Rs.14.061 is concerned, the same is restored as there was no need of issuance of show-cause notice of .passing a C speaking order. The same has been charged on I.T.-30. It is in accordance with law. I. T. A. No. 1401/LB of 1999 (Assessment year 1996-97) In this appeal the direction for acceptance of declared lease money has been agitated. The CIT(A) has dilated that there is no material on record to sustain the estimate in the presence of valid lease agreements with verifiable parties who are running the industry but on the other hand, it has been contended by the Revenue that the declared lease money that the assessee has failed to substantiate its claim, therefore, on this issue the order of both the authorities below are set aside. The assessee shalf appear before the Assessing Officer in order to substantiate his declared lease money. The setting aside of disallowance of depreciation to the extent of addition of fixed assets is upheld. The deletion of. tax under section 88 is restored as the same is on account of failure to pay tax with the return as envisaged under the Income Tax Ordinance. In Appeal No.1402/LB of 1999 for the charge year 1996-97 the rectification in the original order for deleting the add-back of machinery repair is set aside and remitted back to the Assessing Officer who shall give an opportunity to the assesse of being heard before deciding this issue. In Appeal No.1403/LB of 1999 for the charge year 1996-97 as far as the cancellation of penalty under section 110 is concerned, the reply to the notice under section 62, the detail of which has been given in page 2 of the CIT(A)'s order the sequel shows that there was a request for adjournment by the assessee as the issue was legal and was sub judice before the CIT(A) for the charge year 1995-96 and the appeal was fixed for 7-12-1998. The notice was issued by Department on 4-12-1998 andl the reply to the notice was given on 11-12-1998. In this view of the E matter, the deletion . of penalty is according to law and is, therefore, upheld. The appeal of the Revenue fails on this issue. Appeal No. 1404/LB of 1999 {Assessment year 1997-98). As I have already set aside the first issue in the other Revenue's appeals; therefore, the same is also set aside and the declared lease money should be substantiated before the Assessing Officer. On the second point i.e. setting aside of disallowance of depreciation to the extent of addition of fixed assets is concerned, the set aside is upheld. On the third issue i.e. deletion of addition under section 88 the deletion is restored as it was incumbent for the assessee to have deposited the tax due alongwith the return. In Appeal No. 1405/LB of 1999 for 1997-98 there is only one issue regarding deletion of add-back under the bead machinery repairs which was made after specific confrontation. The same is set aside and the appeal is remitted back to the Assessing Officer for its de novo decision after giving an opportunity of being heard to the assessee. I.T.A. No. 1406/LB of 1999 for 1997-98. On the issue of cancellation of penalty under section 110, the appeal is dismissed for the reasons given for the charge year 1996-97. All the appeals are decided as stated above. C.M.A./M.A.K./136/Tax (Trib.) Appeal dismissed,