MUHAMMAD ASHIQ ALIAS BABU VS STATE
1991 P T D 874
[Lahore High Court]
Before M. Mahboob Ahmad; C.J. and Malik Muhammad Qayyum, J
Messrs NASIR MUGHIS LTD., LAHORE
versus
INCOME-TAX OFFICER, COMPANIES CIRCLE VII, LAHORE
Tax Reference Nos. 65 of 1973, heard on 04/03/1991.
Income-tax Act (XI of 1922)---
----S. 15-BB---Dividend income received out of the tax-holiday profits was exempted.
Commissioner of Income-tax and others v. Mst. Surriya Farooq and others 1987 SCMR 1297; Commissioner of Income-tax (East) Karachi v. Ebrahim D. Ahmed PLD 1982 Kar. 470 and Commissioner of Income-tax, Karachi (East) v. Yasin Ali Akbar H. Ibrahim PLD 1982 Kar. 847 ref.
Muhammad Amin Butt for Petitioner.
Muhammad Ilyas Khan for Respondent.
Date of hearing: 4th March, 1991.
JUDGMENT
M. MAHBOOB AHMAD, CJ..---In this Tax Reference only two questions have been sought to be framed for answer by this Court. They are:--
"(i) Whether on facts sand in the circumstances of the case the learned Tribunal was right in holding that the imposition of tax on the "free reserves" of Rs.3,51,503 under the provisions of section 3 of the Income-tax Act, read with Finance Ordinance, 1969, was lawful?
(ii) Whether on facts and in the circumstances of the case the Tribunal rightly rejected the assessee's claim to exemption of dividend income received out of the Tax-Holiday Profits of Ismail Cement Industries Ltd. exempt from tax under section 15-BB of the Act and whether the assessee's contention that the profits were exempt notwithstanding the 1972, amendment has been rightly rejected?"
2. As regards the first question, the learned counsel for the petitioner states that the petitioner would not press the same: so far as this assessment year is concerned.
3. In respect of the second question, it is submitted by both the learned counsel that the same stands squarely answered by the judgment of the Supreme Court of Pakistan in case of Commissioner of Income-tax and others v. Mst. Surriya Farooq and others reported as 1987 S C M R 1297 as also in the cases Commissioner of Income-tax (East) Karachi v. Ebrahim D. Ahmed (P L D-J982 Karachi 470) and Commissioner of Income-tax, Karachi (East) v. Yasin Ali Akbar H. Ibrahim (P L D 1982 Karachi 847).
4. In view of the foregoing discussion, this reference petition so far as Question No.l is concerned is dismissed as not pressed, whilst Question No.2 is i answered in the negative i.e. as follows:--
"On facts and in the circumstances of the case, the learned Income-tax Appellate Tribunal did not rightly reject the assessee's claim to exemption of dividend received out of the Tax-Holiday Profits of Ismail Cement Industrial Ltd. exempt from tax under section 15-BB of the Act and that the assessee's contention that the profits were exempted was not rightly rejected."
5. There will be no order as to costs.
M.BA./N-462/LAnswer accordingly.