I.T.AS. NOS. 1975/KB, 320/KB, 869/KB, 866/KB, 2494/KB OF 1991-92, 1427-A/HQ OF 1990-91, VS I.T.AS. NOS. 1975/KB, 320/KB, 869/KB, 866/KB, 2494/KB OF 1991-92, 1427-A/HQ OF 1990-91,
1999 P T D (Trib.) 1528
[Income-tax Appellate Tribunal Pakistan]
Before Muhammad Mujibullah Siddiqui, Chairman, S. M. Sibtain, Accountant Member and' Nasim Sikandar, Judicial Member
I.T.As. Nos. 1975/KB, 320/KB, 869/KB, 866/KB, 2494/KB of 1991-92, 1427-A/HQ of 1990-91, 435/KB and 60/KB of 1988-89, decided on 30/11/1998.
(a) Income Tax Ordinance (XXXI of 1979)---
----Second Sched. Part I, Ss.2(24)(44), 9, W & 14---Exemption---Exempt income---Computation of---Legal obligation/requirement---Income enumerated in Part I of the Second Sched. of the Income Tax Ordinance, 1979, being incomes as defined under S.2(24), Income Tax Ordinance, 1979 being part of total income as defined under S.2(44) of the Ordinance is liable to charge of tax under Ss.9 & 10. Income Tax Ordinance, 1979---Since the charge under Ss.9 & 10 was subject to the provisions of the Ordinance and since cl. (a) of S. 14(l) and the clauses of Part I of the Second Sched. provide that incomes enumerated therein shall be exempt from tax, Assessing Officer, after computing any or all such incomes, accruing to an assessee, as his total income, shall allow such incomes, profits and gains to escape tax.
(b) Income Tax Ordinance (XXXI of 1979)---
----S.35---C.B.R. Circular No.21 C.No. 13(19) IT-I/80, dated 24-10-1988. para. 2---C.B.R. Circular No.23 C. No. 1(40 ) IT-JI/79, dated 8-11-1988, para. 2(ii) & (iii)---Carry forward of business loss---Tax holiday period- Clarification---Clarifications issued by Central Board of Revenue vide para.2 of Circular No.21 of 1988 and vide sub-paras. (ii) & (iii) of para. 2 of Circular No.23 of 1988 regarding inability to carry forward losses on account of unabsorbed depreciation or other accumulated business losses to be adjusted against profits of the post-tax-holiday period have no basis in law and there was no provision in law imposing such restrictions or obligations-- Clarifications, thus, were ultra vires of the law.
(c) Income-tax---
----Exemption and non-liability---Different concepts---Non-liability connotes that the subject was never in the tax net, while the exemption connotes that it was, but has been permitted to escape.
(1975) 99 ITR 118 and 1986 SCMR 1917 rel.
(d) Income Tax Ordinance (XXXI of 1979)---
----S.14 & Second Sched., Part I, Cl. (119)---Exempt income of industrial undertaking---No finding on declared income/loss was called for because income of industrial undertaking qualified for exemption under the Second Sched of the Income Tax Ordinance, 1979---Tribunal set aside the order with the direction to assess the income/loss in accordance with law after proper examination of accounts.
(e) Income Tax Ordinance (XXXI of 1979)---
----Ss.34, 35, 14 & Second Sched., Part I---Industrial undertaking---Set off of loss---Carry forward of business loss---Refusal to allow carry forward business loss of exempt period---Validity---Tribunal directed that in case loss was assessed from industrial undertaking, it should be set off against income from any other source in that assessment year and so much of the loss as has not been so set off, shall be carried forward and set off in accordance with the provision of S.35 of the Income, Tax Ordinance, 1979. [pp. 1549, 15501 E & G
CIT v. Anwar Textile Mills Ltd. 1988 PTD 1016; 1989 PTD (Trib.) 1199; I. T. As. Nos. 897 and 898/KB of 1982-83; I. T. A. No. 1221/KB of 1982-83; CIT v. Harprasad & Company (Pvt.) Limited (1975) 99 ITR 118; I.T.A. No. 220/HQ of 1990-91; I.T.A. No.1017/HQ of 1990-91, I.T.A. No.320/KB of 1991-92; and Al-Samrez Enterprise x-. The Federation of Pakistan 1986 SCMR 1917 ref.
(f) Income Tax Ordinance (XXXI of 1979)---
----Ss.35, 14 & Second Sched., Part I---Industrial undertaking---Carry forward of business loss---Exemption from tax---Unabsorbed depreciation-- Refusal by Assessing Officer to bring forward the unabsorbed depreciation of the period specified for exemption from tax for setting off same against income of immediately succeeding assessment year in which profits and gains derived from industrial undertaking were not exempt---Validity---Tribunal directed that in case loss on account of unabsorbed depreciation had been assessed in immediately preceding year, it should be brought forward and set off against profits and gains derived from the same industrial undertaking, assessable for the present assessment year, in accordance with the provisions of S.35 of the Income Tax Ordinance, 1979.
CIT v. Anwar Textile Mills Ltd. 1988 PTD 1016; 1989 PTD (Trib.) 1199; I. T. As. Nos. 897 and 898/KB of 1982-83; I. T. A. No. 1221/KB of 1982-83; CIT v. Harprasad & Company (Pvt.) Limited (1975) 99 ITR 118; I.T.A. No. 220/HQ of 1990-91; I.T.A. No.1017/HQ of 1990-91; I.T.A. No.320/KB of 1991-92 and Al-Samrez Enterprise v. The Federation of Pakistan 1986 SCMR 1917 ref.
Misri Ladhani, D. R. for Appellant (in I.T.A. No.1975/KB of 1991-92).
Sirajul Haque and Arshad Siraj for Respondent (in I.T.A. No. 1975/KB of 1991-92).
Sirajul Haque and Arshad Siraj for Appellant (in I.T.A. No.320/KB of 1991-92).
Misri Ladhani, D. R. for Respondent (in I.T.A. No.320/KB of 1991-92).
A. H. Faridi for Appellant (in I.T.As. Nos. 1427-A/HQ of 1990-91 and 869/KB of 1991-92).
Misri Ladhani, D. R. for Respondent (in I.T.As. Nos. 1427-A/HQ of 1990-91 and 869/KB of 1991-92).
Salman Pasha for Appellant (in I.T.A. No.866/KB of 1991-92).
Misri Ladhani, D. R. for Respondent (in I.T.A. No.866/KB of 1991-92).
Rehan Hassan Naqvi for Appellant (in I.T.A. No. 435/KB of 1988-89).
Misri Ladhani, D. R. for Respondent (in I.T.A. No.435/KB of 1988-89).
Irfan Sadat for Appellant (in I.T.A. No.60/KB of 1988-89).
Misri Ladhani, D. R. for Respondent (in I.T.A. No.60/KB of 1988-89).
Misri Ladhani, D. R. for Appellant (in I.T.A. No.2494/KB . of 1991-92).
Irfan Sadat for Respondent (in I.T.A. No.2494/KB of 1991-92).
Date of hearing: 4th June, 1998.
ORDER
S. M. SIBTAIN (ACCOUNTANT MEMBER) ----This Full Bench is constituted specifically for considering the objection taken in these appeals with specific reference to the treatment of loss incurred by assessees whose cases attract the provisions of various clauses of the Second Schedule of the Income Tax Ordinance, 1979, granting exemption from charge of tax to the profits and gains derived by assessees from industrial undertaking during the periods specific therein.
2. Objection in I.T.A. No-1975/KB of 1991-92 (Assessment year 1989-90), taken on behalf of the Department is on the following ground:
"That the learned C.I.T.(A) was not justified in directing to carry forward the business loss of exemption period. "
3. In I.T.A. No.320/KB of 1991-92 (Assessment year 1990-91), instituted at the instance of the assessee, objection is taken on the following grounds:
"That the learned C.I.T. erred in refusing to allow the carry forward of the loss of Rs.13,376,292 including depreciation of Rs.8,267,607.
That the learned C.I.T. erred in holding that 'since loss claimed has not been determined by I.T.O.' s application of mind to the facts of the case, the same cannot be carried forward within the meaning of section 35 of the Ordinance.'
That the learned C.I.T. also erred in holding that 'consequently, since also the losses have not been determined, these cannot be carried forward for the claims suffer from the disability of being amorphous.'
4. Objection taken in I.T.A. No. 1427-A/HQ of 1990-91 (Assessment year 1989-90) is on the following ground:
"That the learned C.I.T.(A) has erred in not directing for assessing the loss on tax holiday unit for being set off against taxable profits and to be carried forward. "
5. Objection in I.T.A. No.869/KB of 1991-92 (Assessment Year 1990-91) is taken on the following ground:
"That the learned C.I.T.(A) has erred in holding that the loss suffered by the appellant was covered by exemption allowed under clause (119) of Second Schedule when the same covers only profit and not loss."
6. Objection in I.T.A. No.866/KB of 1991-92 (Assessment Year 1990-91) is taken to the order of the CIT(A) for upholding the order of the D.C.I.T. ignoring the declared loss of Rs.4,698,927 and determining nil income.
7. In I.T.A. No.435/KB of 1988-89 (Assessment Year 1988-89) upholding of refusal to bring forward the absorbed depreciation of the exemption period amounting to Rs.7,454,840 and to allow to set off under section 35 of the Ordinance is objected to.
8. Objection in I.T.A. No. 60/KB of 1988-89 (Assessment Year 1987-88) is taken on the following ground:
"That the learned C.I.T.(A) has erred in upholding the action of the learned Income Tax Officer who disregarded the returned loss of Rs.82,328,248 and made the assessment at an income of Rs.5,21,212 on the grounds that your appellant enjoys tax holiday under clause (119) of the Second Schedule to the Income Tax Ordinance, 1979." '
9.Objection taken in I.T.A. No.2494/KB of 1991-92 (Assessment Year 1990-91), at the in trance of the Department, is on the following ground:
"That the learned C.I.T.(A), Zone-II, Karachi was not justified in directing to compute losses under section 22 of Income Tax Ordinance, 1979 as the clause (122) of Second Schedule provides that the 'profits and gains' are exempt under this clause but there is no provision that the losses will be carried forward. "
10. Thus, two of these eight appeals are instituted at the instance of the Department and six appeals are instituted at the instance of the assessees.
11. Stated in general terms the Department holds the view that the phrase "profits and gains derived by an assessee from an industrial undertaking", as used in several clauses of the Second Schedule to the Income Tax Ordinance, 1979, means income from business and the term "income", as defined under subsection (24) of section 2, includes any loss of such income, profits and gains and by virtue of exemption from tax granted under the Second Schedule in pursuance to provisions of section 14, such income, profits and gains are excluded from the total income of assessee. It follows from the view supra that any income excluded from total income is not assessable and as such remains undetermined hence incapable of being carried forward. Regarding the allowance of depreciation admissible under section 23(l)(v), the Department holds the view that the W.D.V. of such assets in the year in which income of such undertakings is first assessable after the expiry of exemption period is the book value as on the first day of the corresponding income year after adjusting normal statutory depreciation.
12. The learned Assessing Officers, in holding the views supra, have statedly followed the instructions given by the Central Board of Revenue vide Circulars Nos.21 and 23 of 1988 and decisions in I.T.As. Nos.897 and 898/KB of 1982-83, dated 23-8-1984 and in I. T. A. No. 1221/KB of 1982-83, dated 10-9-1984.
13. The Central Board of Revenue vide Circular No. 21 C. No.13(19) IT-I/1980, dated October 24, 1988 directs as under:
"References have been received in the Board seeking clarification regarding the requirements of filing of returns, determination of taxability of income and income itself in case where exemption from income-tax is available under the Second Schedule to the Income Tax Ordinance, 1979.
It is clarified that a person enjoying income exclusively from sources exempt from taxation under the Income Tax Ordinance are not obliged to file a return of income. For example, a person deriving income solely from agriculture, dividend income from listed companies, etc. is not required to file the return of income. Legally, if such a person files the return declaring exempt income, such return cannot be considered as a return of total income. Hence, no proceedings under the law can be initiated in respect of such return. The income-tax authority, receiving such a return may inform the person furnishing the return that the said return, being invalid, has been filed. However, where such return declares an income which, ex facie, cannot be reasonably attributed to the exempt source declared, it is obviously a case where taxable income (from business etc.) is being declared as exempt income. In such a case, it is the duty of the assessing authority to pass an order determining a reasonable proportion of the declared income to the exempt source and taxing the remaining portion under section 13.
Further, Part-II of IT-11, requires declaration of exempt income. This provision has been specifically made in the form of return to ensure that an assessee having income both form non-exempt and exempt sources discloses the income from both such sources. In such cases, the income-tax authority can determine whether or not the exemption claimed is in accordance with law and if so the income declared is reasonable considering the facts of the case. In case, the income declared from exempt source is unreasonably high, the excess can be attributed to income from undisclosed sources taxable under section 13.
The Income Tax Ordinance also provides for exemption of certain income contingent upon fulfilment of certain conditions. For example, claims of exemption under clauses (93) to (108) and (113) to (128) of Part I of the Second Schedule to the Income Tax Ordinance, 1979, are of the type where the issue is to be decided on yearly basis. In such cases, returns are to be called for under section 56 if not filed voluntarily, and examined with reference to the conditions required to be fulfilled. An order must be passed in such cases. Where the assessing authority is of the opinion that the income declared is in excess of what can be reasonably attributed to such exempt source, the excess should be taxed under section 13 of the Income Tax Ordinance, 1979. "
14. Instructions given vide Circular No.23 C.No.l(40) IT-JI/1979, dated November 8, 1988 are as under:
"References have been received in the Board seeking clarification as to the treatment of depreciation allowance and brought forward losses during and after the tax holiday period.
The undersigned is directed to clarify the various issues raised in this behalf as under:
(i) Various clauses of Part I of the Second Schedule exempt income of certain industrial undertakings. Such income can be exempted after it is computed. Sections 22 to 25 of the Income Tax Ordinance, 1979 lay down the method of computation of income under the head 'Income from business or profession' after making certain allowances and deduction including the depreciation allowance. Unlike the provisions of section 15-BB (4-A)(C) of the repealed Income-tax Act, 1922 which did not allow the deduction of initial depreciation allowance from income during the tax holiday period, the Income Tax Ordinance, .1979 does not make any exception. A strict interpretation of law would, therefore, require deduction of all depreciation allowances (initial and normal) from the written down value, yet such a treatment would defeat the very purpose of tax holiday. However, normal depreciation allowance represents the wear and tear of an asset during the year while the initial and extra shift depreciation allowances have been allowed as fiscal incentives. It has, therefore, been decided that only normal depreciation allowance will be deducted while computing income during the tax holiday period. As a result written down value of an asset at the commencement of the post-tax-holiday period would be its original cost minus normal depreciation allowable from year to year during the tax holiday period.
(ii) The unabsorbed depreciation allowance would not be carried forward to be adjusted against the profits of the post-tax-holiday period.
(iii) On the same principle, the accumulated business loss would also not be carried forward and adjusted against the profits of the post-tax holiday period. "
15. The loss of Rs.16,656,924 declared by Automotive Battery Company Limited in 1989-90 has been assessed at NIL amount with the following observation:
"The assessee has commenced its commercial production w.e.f. May, 1987 and its five-year period of exemption will end on April, 1992. The assessee has satisfied all the conditions for exemption available under section 119, therefore, its claim for exemption is accepted. In the circumstances, no findings regarding quantum of exempt income (or loss) are called for."
16. The learned C.I.T.(A), relying upon the decisions reported as CIT v. Anwar Textile Mills Ltd.: 1988 PTD (H.C. Kar.) 1016 and 1989 PTD (Trib.) 1199, has set aside the assessment with the directions to assess the income/loss in accordance with law after proper examination of accounts.
17. In assessment year 1990-91 the declared loss of Rs.13,376,282 has been ignored and proceedings are filed with the following observations:
"Since the income of the assessee is exempt from tax, hence the determination of quantum of Income/Loss is not called for.
Therefore, proceedings are filed considering the contents of Circular No.21 of 1988, dated 24-10-1988 and the following decision of the learned I.T.A.T.:---
(1) I.T.As. Nos.897 and 898/KB of 1982-83, dated 23-8-1984 (Assessment Year 78-79 and 79-80)
(2) I.T.A. No.1221/KB of 1982-83, dated 23-8-1984 (Assessment Year 1980-81)."
18. The learned C.I.T.(A) has upheld the order holding:
"This is already a decided issue in terms of the learned Tribunal orders in I.T.As. Nos. 1221/KB of 1982-83/KB (sic) of 1980-81, dated 10-9-1984 wherein it was held that determination of income or loss of an assessee enjoying income from an exempted source was extra jurisdictional. In this view of the matter since loss claimed has not been determined by I.T.O.' s application of mind to the facts of the case, the same cannot be carried forward within the meaning of section 35 of the Ordinance."
19. He has also placed reliance on the decision in C. T. v. Harprasad & Company (Pvt.) Limited (1975) 99 ITR 118 (S.C. Ind.).
20. The learned C.I.T. (A), in the case of H.M.A. Stainless Steel Pump Manufacturing (Pvt.) Limited, has upheld the impugned assessment in 1989-90 with the finding:
"Depreciation claimed has rightly been disallowed which is not connected with the taxable trading activity of the appellant.
The assessing authority was again justified in disallowing financial expenses and refusing the set off loss from exempt unit against the taxable income because the capital borrowed was fully utilised for the purchase of capital assets pertaining to tax holiday unit and as such the same cannot be claimed against the profit of taxable unit. For similar reason loss from exempt unit cannot be set off against the taxable income. The action of the assessing authority being in accordance with the law is, therefore, upheld. "
21. In the assessment year 1990-91, relying upon the directions in C.B.R. Circular 21 of 1988 and decisions in I.T.As. Nos.897 and 898/KB of 1982-83, dated 23-8-1984 and I.T.A. No. 1221/KB of 1982-83, dated 13-9-1984, he has again held:
"In my opinion, the action of the assessing authority in filing proceedings instead of framing regular assessment was quite justified in view of the fact that income of the appellant was exempt from tax under clause (119) of the Second Schedule and in accordance with the Board's direction and findings of the learned Income Tax Appellate Tribunal in the two cases quoted above. No interference is, therefore, called for and action of the assessing authority is hereby upheld. " '
22. The learned .C.I.T.(A), in Higrow Poultry Breeding Company (Pvt.) Limited, in assessment year 1990-91, has again upheld the impugned order of the D.C.I.T. ignoring the declared loss and filing the proceedings under the circumstances and for the reasons identical to the immediately preceding case.
23. In the case of Balochistan Concrete and Block Works Limited (Assessment Year 1988-89) the learned C.I.T.(A) has upheld the order of the DCIT refusing to bring forward the unabsorbed depreciation of the period in which income of the appellant has remained exempt under clause (119) of the Second Schedule and setting it off against income in the taxable period or to carry it forward to subsequent years, following the instructions contained in C.B.R. Circular No.23 of 1988 (supra). The exemption period has expired in the preceding year.
24. In the case of Bolan Castings Limited the appellant, in assessment, ear 1987-88, has declared other income of Rs.3,96,031 and net loss of Rs.82,724,279 inclusive of tax depreciation of Rs.67,513,542 from the industrial undertaking qualifying for exemption under clause (119) of the Second Schedule. The learned D.C.I.T. has determined the loss under clause (119) at Rs.82,328,248 refusing to allow set off of the losses against income from other source which is charged to tax. The learned C.I.T.(A) has upheld the chargeability to tax of income from other source and has further held:
"Lastly, regarding the treatment of carry forward of the depreciation or the business losses of exempt period, the C.B.R. Circular No.23 of 1988, dated 8-11-1988, is very clear that there would be no such bringing forward for set off purposes after expiry of the Exemption
24. In the last appeal fixed before us today, at the instance of Gypsum Corporation Limited in respect of assessment year 1990-91, the learned ('.I.T.(A), has directed to examine and consider the declared loss of Ks.16,466,039 from the industrial undertaking, the profits and gains where from qualify for exemption from tax under clause (122) of the Second Schedule, and to compute them under section 22 of the Income Tax Ordinance. The learned C.I.T.(A) has given the direction supra, impugned at the instance of the Department in this appeal, following the order of his learned predecessor in assessment year 1989-90 who has placed reliance upon the reported decision of the Single Bench of the Tribunal in: 1989 PTD (Trib.) 1199. A Division Bench of the Tribunal has already confirmed the order of his predecessor ibid in I.T.A. No.220/HQ of 1990-91 (Assessment Year 1989-90), dated 30-3-1991 in which the Division Bench has followed the decision of the Single Bench (ibid).
25. Thus, the issues for our consideration and adjudication, precisely, are:
(1) Whether the profits and gains derived from an industrial undertaking etc., as envisaged under various claims of the Second Schedule from clauses (118-A) to (126-E) for exemption from tax under the Income Tax Ordinance, 1979, are excluded from the concept of total income as defined under subsection (44) of section 2 of the Ordinance?
(2) If the answer to question No. 1 (supra) is negative, whether the total income of assessees who are deriving the profits and gain supra, inclusive of such profits and gains, is to be computed in the manner laid down in the Ordinance?
(3) If the answer to question No.2 (supra) is affirmative whether any loss incurred from operation of such industrial undertaking etc., during the period the profits and gains derived there from are entitled to exemption from charge of tax under the clauses (supra), shall also be so computed and determined including any amount of unabsorbed depreciation allowance?
(4) If the answer to question No.3 is affirmative, whether such determined loss can be set off against income of such assessee from any other source for the same assessment year under section 34 of the Ordinance?
(5) Further, if the answer to question No.3 is affirmative, whether the loss or losses so incurred can be carried forward from year to year for the purposes of being set off against profits and gains from the same source in the succeeding year or years, as the case may be, during the exempt period (supra) as well as beyond such exempt period to be set off against the chargeable to tax profits and gains from the same source under section 35 of the Ordinance?
26. As observed supra, the foregoing questions have arisen on account of contradictory decisions of the Tribunal cited on behalf of the two sides, both at the assessment stage as well as at the first appellate forum. Two unreported decisions in I.T.As. Nos.897 and 898/KB of 1982-83 (Assessment Year 1978-79 and 1979-80) said to be recorded on 23-8-1984 and in I.T.A. No.1982/KB of 1980-81 and I.T.A. No.1221/KB of 1982-83 (Assessment Year 1980-81) said to be recorded on 10-9-1984 have been cited to support the view that determination of income or loss from an exempt source is extra jurisdictional and as such neither any assessment of such profits and gains during the exempt period is warranted nor any loss incurred during such period is required to be, determined nor to be set off against income from any other source during the same year under section 34 nor to be carried forward to succeeding year or years to be set off under section 35 of the Ordinance. On the other hand, the reported decisions of Sindh High Court in the case of CIT v. Anwar Textile Mills: 1988 PTD 1016 and of the Single Bench of Tribunal in 1989 PTD (Trib) 1199 subsequently followed by Division Benches in I.T.A. No.220/HQ of 1990-91 (Assessment Year 1989-90, dated 30-3-1991 and in I.T.A. No. 1017/HQ of 1900.91 (Assessment Year 1988-89), dated 10-11-1991 are relied upon to support the view firstly, that the provisions of subsection (1) of section 15-BB of income-tax Act, 1922 (repealed) and the provision of relevant clauses of the Second Schedule of Income Tax Ordinance, 1979 ibid are not in para materia because while the former specifically provided that no loss shall be carried forward beyond the period for which the income, profits and gains of the undertaking are exempt, there is no such provision in the relevant clauses of Second Schedule. Secondly, that exemption form tax is allowed under the Ordinance to profits and gains that are computable as total income under section 22 unlike a receipt that, by its very nature, either does not fall under the definition of total income or is specifically excluded as such under the Ordinance and needs no specific exemption. It, therefore, follows that wherever exemption is allowed under a specific clause of Second Schedule to the profits and again derived from an industrial undertaking these are required to be computed under section 22 and allowances and deductions shall have to be made in accordance with the provisions of section 23 and profits and gains so determined shall be allowed exemption from tax under the relevant clause during the period specified therein. It further follows that in case a loss is incurred from such industrial undertaking in any year or years during the period of exemption specified therein, it shall also be computed likewise and once the loss is determined in consequence of assessment proceedings all other normal provision of law shall be applicable to such loss because there is no provision in law to the contrary.
27. While the former view is canvassed on behalf of the Department by Mr: Misri Ladhani, the learned representative of the Department, the later view is supported and canvassed by Mr. Sirajul Haq Memon, Mr. Arshad Siraj, Mr. A.H. Faridi, Mr. Salman Pasha, Mr. Irfan Saadat and Mr. Rehan Hasan Naqvi, the learned counsel appearing on behalf of the assessees/appellants/respondents.
28. However, Mr. Misri Ladhani is unable to submit before us the copies of unreported decisions said to be recorded by the Tribunal in I.T.As. Nos. 897 and 898/KB of 1982-83 on 23-8-1984 and in I. T. A. No. 1221/KB of 1982-83 on 10-9-1984, that are cited by the learned Assessing Officer in the assessment order impugned before us in I.T.A. No.320/KB of 1991-92. The copies of decisions cited supra are neither available in the records of assessment proceeding nor with any of the learned counsel nor in the Record Branch of the Tribunal. Thus, none of the said decision of the Tribunal cited supra are actually brought to our notice.
29. Regarding the reliance placed, on behalf of the Department on the decision of the Supreme Court of India in the case of CIT v. Harprasad & Co. (Pvt.) Ltd. (1975) 99 ITR 118 to support the view that losses suffered during the period of exemption from tax cannot be carried forward and set off against the income derived in the year. or years after expiry of tax exemption period, we find that the reliance is misplaced because in the case (ibid) during the accounting period ending April 30, 1954, relevant to the assessment year 1955-56, the assessee sold certain shares at a loss of Rs.28,662, which it claimed as a revenue loss. Both the Income-tax Officer and the Appellate Assistant Commissioner rejected the claim on the ground that the loss was a capital loss. On appeal, the Appellate Tribunal accepted the contention of the respondent raised for the first time that the capital loss of Rs.28,662 should be carried forward and set off against capital gains, if any, in the future, even though tax was not chargeable under section 12-B of the Indian Income-tax Act, 1922, on capital gains derived during April 1, 1948 to March 31, 1956. On a reference, the High Court held that if capital loss was incurred in a year in which capital gains did not attract tax under section 12-B such loss would still be loss under the head "capital gains" and it could be carried forward and set off against capital gains in a subsequent year. On appeal to the Supreme Court by the Commissioner the Court observed:---
"Capital gains tax for the first time was introduced by the Income Tax and Excess Profits Tax (Amendment) Act, 1947 (22 of 1947), which inserted section 12-B in the Act. This section made taxable 'capital gains' which arose after March 31, 1946. The same Act of 1947 added as the VIth head 'capital gains' in section 6 of the Act. It also inserted subsections (2-A) and (2-B) in section 24 of the Act.
The Indian Finance Act, 1949, virtually abolished the levy and restricted the operation of section 12-B to 'capital gains' arising before the 1st April, 1948. But section 12-B, in its restricted form, and the VIth head, 'capital gains' in section 6, and subsections (2-A) and (2-B) of section 24 were not deleted and continued to form part of the Act. The Finance (No.3) Act, 1956, reintroduced the 'capital gains' tax with effect from the 31st March, 1956. It substantially altered the old section 12-B and brought it into its present form. As a result of the Finance (No.3) Act of 1956, 'capital gains' again became taxable in the assessment year 1957-58. The position that emerges is that 'capital gains' arising between April 1, 1948, and March 31, 1956, were not taxable. The capital loss in question relates to this period. "
"The material part of section 12-B at the relevant time was as follows:
12-B(1).---The tax shall be payable by an assessee under the head 'capital gains' in respect of any profits or gains arising from the sale, exchange or transfer of a capital asset effected after the 31st day of March, 1946, and before the 1st day of April, 1948, and such profits and gains shall be deemed to be income of the previous year in which the sale, exchange or transfer took place.'
'Although section 6 classifies income under six heads, the main charging provision is section 3 which levies income-tax, as only one tax, on the 'total income' of the assessee as defined in section 2(15).
An income in order to come within the purview of that definition must satisfy two conditions. Firstly, it must comprise the 'total amount of income, profits and gains referred to in section 4(1)'. Secondly, it must be 'computed in the manner laid down in the Act'. If either of these conditions fails, the income will not be a part of the total income that can be brought to charge.
Now, capital gains would be covered by the definition of 'income' in subsection (6-C) of section 2, only if they were chargeable under section 12-B. As noticed already, section 12-B as modified by the Finance Act, 1949, did not charge any 'capital gains' arising between April 1, 1948, and April 1, 1957. Indeed section 12-B was not operative in these years (1942-57).
The Court, therefore, held:
Thus, in the relevant previous year and the assessment year, or even in the subsequent year, capital gains or 'capital losses' did not form part of the 'total income' of the assessee which could be brought to charge, and were, therefore, not required to be computed under the Act.
30. Regarding the carry forward of loss and its set off in subsequent year or years the Court observed:
"It may be remembered that the concept of carry forward of loss does not stand in vacuo. It involves the notion of set off. Its sole purpose is to set off the loss against the profits of a subsequent year. It presupposes the permissibility and possibility of the carried forward loss being absorbed or set off against the profits and gains, if any, of the subsequent year. Set off implies that the tax is exigible and the assessee wants to adjust the loss against profits to reduce the tax demand. It follows that if such set off is not permissible or possible owing to the income or profits of the subsequent year being from a non-taxable source, there would be no point in allowing the loss to be 'carried forward'. Conversely, if the loss arising in the previous year was under a head not chargeable to tax, it could not be allowed to be carried forward and absorbed against income in a subsequent year from a taxable source. "
31. Thus, the ratio settled in the decision (ibid), in fact, supports the view, canvassed by the learned counsel appearing before us on behalf of the assessees, that unless the receipt either falls outside the scope of the definition of total income or is specifically excluded from such scope and thus, it is not chargeable to tax under the Ordinance, it is required to be declared, it is required to be computed as part of total income and tax thereon is required to be charged at the rates prescribed in the First Schedule.
However, if the entire total income so computed or a portion or more portions thereof is or are exempt from tax under any clause of Part 1, or entitled to be taxed at a reduced rate under any clause of Part-II or calls for any reduction in tax liability under any clause of Part III or is exempt from specific provisions of the Ordinance under any clause of Part-1V of the Second Schedule, the exemption from or relief in tax shall be allowed accordingly.
32. The learned representative of the Department, finally, has submitted that all incomes, profits and gains falling under Part-I of the Second Schedule are specifically excluded from total income because prior to amendments made by Finance Act, 1988 these were listed under the caption "Exclusions from total income" and on top of the list has been the Agricultural income which is defined in subsection (1) of section 2 of the Ordinance. He has further submitted that the caption of Part-I of Second Schedule, even after substitution of the word "exclusion" by the word "exemption", by Finance Act, 1988, still remains "exemptions from total income"; it is not "exemptions from tax" or "exemptions of income from tax". Further, he submits that the omission of the words "Notwithstanding anything contained in this Ordinance" and simultaneous insertion of a proviso in subsection (1) of section 14 as well as two provisos in clause (1) of Part-I of the Second Schedule, by Finance Act, 1988, lend support to the view being canvassed by him. We are reproducing the provisos (ibid) hereunder for the benefit of reference:
"Proviso inserted after clause (d) of subsection (1) of section 14.
(Provided that, where any income which is exempt from tax under any provision of the Second Schedule, such income, as may be specified in the said Schedule and subject to such conditions as may be specified therein,, shall be included in the total income, so however, that the tax shall not -be payable in respect of such income).
Provisos inserted in clause (1) 'Agricultural income' of Part-I of the Second Schedule.
(Provided that, in case an assessee has, in any income year, any income (other than the agricultural income) which is chargeable to tax (hereinafter called 'chargeable income'), the agricultural income shall be included in the total income, so however, that the tax payable on the chargeable income shall be an amount which bears the same proportion to the chargeable income as the tax or. total income bears to the total income:
Provided further that nothing contained in the first proviso shall apply in the case of an individual, not being a director of a company, whose chargeable income does not consist of, or include, income chargeable under the head 'income from business or profession').
33. The learned D.R. has submitted that there would have been no need to insert the provisos (supra) to enable the inclusion of agricultural income to the total income of an individual who either is a director of a company or whose chargeable income consists of, or includes, income chargeable under the head income from business or profession, had the incomes, profits and gains enumerated in Part-I of the Second Schedule not been exempted from inclusion to the total income.
34. Mr. Sirajul Haq Memon, leading the submissions on behalf of the learned counsel of the assessees/appellants or respondents, has submitted at the outset that it is a well-settled principle of interpretation of statutes that captions cannot be cited to interpret the substantive provision.
35. Next, he submits that all entries in the Second Schedule are made by Notifications in the official Gazette issued by the Federal Government under section 14 of the Income Tax Ordinance, 1979 and subsection (1) of section 14 reads as under:
"14. Exemptions. ---The incomes or classes of income, or persons or classes of persons specified in the Second Schedule shall be---
(a)exempt from tax under this Ordinance, subject to the conditions and to the extent specified therein; or
(b)liable to tax at such rates which are less than the rates specified in the First Schedule, as are specified therein; or
(c)allowed a reduction in tax liability, subject to the conditions and to the extent specified therein; or
(d)exempt from the operation of any provision of this Ordinance, subject to the conditions and to the extent specified therein. "
36. He, therefore, submits that there is no ambiguity in the provisions of the controlling section (supra) regarding the proposition that incomes, profits and gains specified in the Second Schedule shall either be exempt from tax or shall be liable to tax at lower rates or shall be allowed reduction in tax liability or shall be exempt from the operation of any provisions of the Income Tax Ordinance. Thus, according to him, it is abundantly clear that section 14 of the Ordinance does not envisage any situation where the incomes, profits and gains specified in the Second Schedule shall not be computable as total income. Regarding the provisos supra, referred to by Mr. Misri Ladhani, he has submitted that inclusion or inclusions envisaged in the proviso inserted in subsection (1) of section 14 (ibid) is in the context of the application of appropriate slab of the rate of tax to be charged on the chargeable income if the tax was chargeable on the total income including the incomes, profits and gains specified in the Second Schedule as exempt from tax. -Mr. Sirajul Haq Memon submits that the view canvassed by the learned D.R. regarding the effect of amendments made by Finance Act, 1988 (supra) had also been expressed in the decision recorded on difference of opinion on the issue of entitlement of the assessee, qualified under clause (119) of the Second Schedule for exemption from tax on income derived from its industrial undertaking, to carry forward the loss incurred during the exemption period and set it off against income after the exempt period under section 35 of the Ordinance, reported as 1996 PTD (Trib) 197 which has since been withdrawn vide order in M.A. (Rect) No.80/KB of 1995-96 recorded on 7-1-1997.
37. Further-elaborating the concept of 'exemption', Mr. Sirajul Haq Memon refers to the decision in AI-Samrez Enterprise v. The Federation of Pakistan reported in 1986 SCMR 1917 wherein Zafar Hussain Mirza, J., after referring to a passage defining the nature and purpose of exemption in the Corpus Juris Secundum, has observed:
"From the above it would be seen that the concept of exemption presupposes a liability and is a grant or immunity from the payment of duty which would otherwise be attracted in respect of the goods. It has accordingly been held that 'non-liability' and 'exemption' are different concepts, the first connotes that the subject was never in the tax net, while the latter connotes that it was, but has been permitted to escape."
38. He has further submitted that it has been clarified by the C.B.R. in Circular No.23 of 1988 (reproduced supra) that income of certain industrial undertakings specified for exemption from tax in various clauses of Part-I of the Second Schedule can be exempted after it is computed under sections 22 to 25 of the Income Tax Ordinance, 1979. It is further clarified in the Circular that unlike the provisions of section 15-BB (4-A)(C) of the repealed Income-tax Act, 1922, which did not allow the deduction of initial depreciation allowance from income during the tax holiday period, the Income Tax Ordinance, 1979 does not make any exception. Since a strict interpretation of law would, therefore, require deduction of all depreciation allowances (initial and normal) from the written down value, the C.B.R. is of the view that such a treatment would defeat the very purpose of the tax holiday. The Board, therefore, in view of the fact that normal depreciation allowance represents the wear and tear of an asset during the year while the initial and extra shift depreciation allowances have been allowed as fiscal incentives has decided that only normal depreciation allowance will be deducted while computing income during the tax holiday period. As a result written down value of an asset at the commencement of the post-tax holiday period would be its original cost minus normal depreciation allowable from year to year during the tax holiday period.
39. However, clarifications issued by the C.B.R. vide Circular No.21 of 1988, dated October 24, 1988, regarding requirement of filing of returns and assessments in cases of exemption of income under Second Schedule, according to the learned counsel, is not in consonance with the clarifications issued vide Circular No.23 on November 8, 1988 and it has not been withdrawn either. It says that "a person enjoying income exclusively from sources exempt from taxation under the Income Tax Ordinance are not obliged to file a return of income" ..Legally, if such a person files the return declaring exempt income, such return cannot be considered as a return of total income. The Income-tax Authority, receiving such a return may inform the person furnishing the return that the said return, being invalid, has been filed". Although examples of exempt incomes cited in Circular 21 (ibid) are incomes from agriculture and dividend from listed companies etcetra, Mr. Sirajul Haq Memon submits that even such incomes are very much part of total income as defined under the Ordinance and the return declaring even such incomes is a return of total income under the law. The C.B.R. has itself endorsed the legal position supra in Circular 23 (ibid) because it speaks of computation of such income by the Assessing Officer. He submits that notwithstanding the fact that while the word "income" is used in all clauses of Part-I of the Second Schedule except in the clauses granting exemption to "profits and gains" derived from specified industrial undertakings, these fall into the tax net under the Ordinance but have been permitted to escape tax under the Second Schedule. He, therefore, submits that C.B.R. Circular 21 (ibid) tends to misdirect the Assessing Officers. He further submits that sub-paragraphs (ii) and (iii) of paragraph 2 of Circular 23 wherein the Board has clarified that unabsorbed depreciation allowance as well as the accumulated business loss of the period specified in clauses of Second Schedule (ibid) would not be carried forward to be adjusted against the profits of the past holiday period are similarly ultra vires of the law. He submits that there is no basis in law for the clarification supra.
40. Concluding his submissions, Mr. Sirajul Haq Memon, therefore, submits that profits and gains derived from industrial undertakings are specified in clauses (118-A) to (126-E) of the Second Schedule for exemption from tax for the specified period but these are chargeable to tax under sections 9 and 10 of the Ordinance. Consequently these are required to be computed like-any other class of income classified under section 15, under
normal provisions of sections 22 to 25. The Assessing Officer, after computing such profits and gains under the law, shall allow exemption from tax to profits and gains so computed by him. However, if in consequence of such computation, the Assessing Officer determines that an assessee has incurred loss of income from such industrial undertaking, during the period such profits and gains derived from such undertaking are specified for exemption from tax, the loss so assessed shall be taken into consideration in computing income under section 22 if the assessee is engaged in any other business as well and if net loss is assessed under section 22 it shall be set off under section 34 against income of the assessee under any other head during the same period and any, unabsorbed loss, either on account of depreciation allowance or even otherwise, shall be carried forward to subsequent year or years to be set off in accordance with the provisions of section 35 of the Ordinance. He submits that the relief from tax allowed to the assessees supra under the Second Schedule is by way of incentive for industrialisation. The Legislature has put no bar on the jurisdiction of the Assessing Officer to assess the incomes, profits and gains derived from such undertakings at any stage of the setting up or operation thereof. However, if the Assessing Officer assesses, on computation in accordance with law, that the assessee has derived any amount by way of profits and gains during the specified period he shall allow exemption from tax to such amount, in his order.
41. Mr. Rehan Hasan Naqvi, the learned counsel for the appellant in I.T.A. No.435/KB of 1988-89 (supra), has added that while both "profits and gains" as well as "loss of such income, profits and gains" are defined as income under subsection (24) of section 2 of the Income Tax Ordinance, "profits and gains" are not "loss" and vice versa. He, therefore, supports the submission made by Mr. Sirajul Haq Menton (supra) that clauses (118-A) to (I 26-E) of the Second Schedule are attracted only in case where profits and gains are assessed to have been derived, by the Assessing Officers, from the industrial undertakings specified therein.
42. He has further submitted that sub-rule (3-A) of Rule 1 of the Third Schedule inserted by Finance Act, 1992 lends support to the view that income from all industrial undertakings is to be declared in the return of income by the assessees and it is required to be assessed and computed under the Income Tax Ordinance, 1979 and charged to tax under sections 9 and 10, subject to the provisions of the Ordinance that so much of -the assessed profits and gains as are derived from the industrial undertakings specified under the clauses ibid shall be allowed to escape tax. However, the assessment and computation of any loss of such income, profits and gains as well as the subsequent treatment thereof shall be done strictly in accordance with all relevant normal provisions of the Income Tax Ordinance.
43. Mr. Arshad Siraj, Mr. Salman Pasha, Mr. A.H. Farid and Mr. Irfan i> Saadat, the learned counsel appearing before us in instant appeals, have supported the submission of the two learned counsel (supra) and all of them have placed reliance in support of their submissions on the reported decision of the Single Bench in 1989 PTD (Trib.) 1199 followed by several Division Benches of the Tribunal
44. The learned Representative of the Department, Mr. Misri Ladhani, has not been able to offer any further rebuttal of the submissions supra except what he has already submitted.
45. We have carefully considered the submissions made by the two sides (supra) and we are pursuaded to agree with the view canvassed on behalf of the assessees appearing before us as appellants or respondents, for reasons summarised hereunder.
46. We find that the Legislature has deliberately used the words "profits and gains" in clauses (118-A) to (126-E) because there is a possibility of deriving negative income (loss) from an industrial undertaking. If exemption is allowed to the "income" derived from an industrial undertaking then the loss incurred from such source shall not qualify for setting off under sections 34 and 35 of the Ordinance. As such, if profits and gains are derived from the specified industrial undertakings during the specified period the Legislature allows it to escape tax while retaining the income from such source in the tax net. It follows that in case a negative income (loss) is assessed from such industrial undertaking, the clause in Second Schedule, specifying profits and gains derived from such industrial undertaking for exemption from tax, shall not be attracted at all in such case for such assessment year and all the normal provisions of law shall apply to the loss assessed from such source. We, accordingly, are reproducing hereunder with approval the finding of the Single Bench in the case reported as 1989 PTD (Trib.) 1199 wherein the learned Chairman of the Tribunal, while comparing 4,the provisions of section 15-BB of the Income-tax Act, 1922 (repealed) with the provisions of clause (119) of the Second Schedule of Income Tax Ordinance, 1979, has observed that in subsection (1) of section 15-BB the legislature has used the words "income, profits and gains" but in sub section (3) the word "income" is conspicuous by its absence and has concluded:
"Thus, I have no doubt in my mind that this departure is deliberate on the part of the Legislature and consequently supports the contention of Mr. Seedat Haider. To my mind the Legislaturespecifically mentioned section 10 in subsection (3) of section 15-BB of the repealed Income-tax Act because the word 'income' was used in its subsection (1) which include loss also. The idea was that in those cases in which an assessee suffered loss, the computation be made under section 10 of the Income Tax Ordinance so as to make applicable various provisions which help in computation of the loss as well. Similarly to the same effect was introduced the second proviso appended to subsection (3) of section 15-BB of the repealed Income-tax Act. However, clause (119) deals with only the profits and gains of an assessee and not with the loss, therefore, no provision was made for computation of the income under section 22 of the Income Tax Ordinance, 1979. Similarly this clause also does not take into consideration those cases in which an assessee suffers loss and wants to carry forward them to subsequent assessment years. To my mind this omission is deliberate and the obvious reason for this appears to be that since various provisions of the Income Tax Ordinance, 1979, deal with the computation and carry forward of losses, therefore, there was no necessity for incorporating them in clause (119), I am, therefore, of the considered opinion that the conclusion of learned C.I.T.(A) to the contrary is not correct."
47. In arriving at the conclusion supra we are also pursuaded by the unambiguous provisions of clause (a) of subsection (1) of section 14 (supra) as well as the preamble of Part I of the Second Schedule which removes the ambiguity created by its caption The preamble (ibid) reads:
"Incomes, or classes of incomes, or persons or classes of persons, enumerated below, shall be exempt from tax, subject to the conditions and to the extent specified hereunder. "
48. Thus, we have no hesitation in holding that incomes enumerated in Part-I of the Second Schedule of the Income Tax Ordinance, 1979, being incomes as defined under subsection (24) of section 2 are part of the total income as defined under subsection (44) of section 2 liable to charge of tax under sections 9 and 10 of the Income Tax Ordinance. However, since the charge under section 9 as well as under section 10 is subject to the provisions of the Ordinance and since clause (a) of subsection (1) of section 14 and the clauses of Part-I of the Second Schedule provide that incomes enumerated therein shall be exempt from tax, the Assessing Officer, after computing any or all such incomes, accruing to an assessee, as his total income, shall allow such incomes, profits and gains to escape tax. ,
49. We further find that the clarifications issued by the C.B.R. vide paragraph 2 of Circular No.21 of 1988 (supra) as well as vide sub paragraphs (ii) and (iii) of paragraph 2 of the Circular 23 (ibid) regarding inability to carry forward such losses on account of unabsorbed depreciation or other accumulated business losses to be adjusted against profits of the post-tax-holiday period have no basis in law. Since there is no provision in law imposing such restrictions or obligations, the clarifications (supra) are found ultra vires the law.
50. Our view that "non liability" and "exemption" are different concepts is also strengthened by the ratio settled in the decision of the Supreme Court of India in CIT v. Harprasad & Co. (P.) Ltd. (1975) 99 ITR 118 considered C in paragraphs 29 and 30 (supra) and in the decision of the Supreme Court of Pakistan in Al-Samrez Enterprises, v. The Federation of Pakistan 1986 SCMR 1917 considered in paragraph 37 (supra).
51. Lastly, the provisions of section 49 of the Ordinance, reproduced hereunder, have no room for any ambiguity on this issue:
"49. Allowances to be treated as deductions from income.---Save as otherwise provided in this Ordinance, any allowance admissible or any sum exempt from tax under any provision contained in this Ordinance shall be included in the total income, but may be deducted from such income for the purposes of computing the tax payable by an assessee. "
52. Accordingly, we confirm the impugned order of the learned C.I.T.(A) in I.T.A. No.1975/KB of 1991-92 (assessment year 1989-90) wherein he has set aside the order of the D.C.I.T., holding that no finding on the declared income/loss is called for in view of the fact that the industrial undertaking qualifies for exemption under clause (119) of the Second Schedule, with the directions to assess the income/loss in accordance with law after proper examination of accounts. The appeal at the instance of the Department is dismissed, accordingly. Consequently, the orders of learned C.I.T.(A) as well as the learned D.C.I.T. impugned in I.T.A. No.320/KB of 1991-92 (Assessment Year 1990-91) are set aside with the same directions as given by the learned C.I.T.(A) in respect of assessment year 1989-90 (supra). The appeal is allowed in the manner supra.
53. Similarly in I.T.A. No.1427-A/HQ of 1990-91 (Assessment Year 1989-90) and I.T.A. No.869/KB of 1991-92 (Assessment Year 1990-91) we set aside the impugned orders of the learned C.I.T.(A) as well as the DCIT with the directions to assess the income/loss from the industrial undertaking in accordance with law keeping in view our findings supra, after proper examination of accounts and in case any loss is assessed from this source it should be set off against income from any other source in that assessment year and as much of the loss as has not been so set off, shall be carried forward and set off in accordance with the provisions of section 35 of the Ordinance. The appeals are allowed in the manner supra.
54. Likewise the orders of the learned C.I.T.(A) as well as the learned D.C.I.T. impugned in I.T.A. No.866/KB of 1991-92 (Assessment Year 1990-91) are set aside with the same directions as recorded in paragraph 53 (supra). The appeal is allowed in the manner supra.
55. Regarding the order of the learned C.I.T.(A), impugned in I.T.A. No-435/KB of 1988-89 (Assessment Year 1988-89), upholding the refusal of the learned D.C.I.T. to bring forward the unabsorbed depreciation, of the period specified for exemption from tax under clause (119) (ibid), for setting it off against the income of the immediately succeeding assessment year in which the profits and gains derived from such industrial undertaking are no more exempt we set aside the order of impugned refusal with the direction that in case any loss on account of unabsorbed depreciation has been assessed in the immediately preceding year !t shall be brought forward and set off against the profits and gains, derived from the same industrial undertaking, assessable for the instant assessment year, in accordance with the provisions of section 35 of the Ordinance. The appeal is allowed in the manner supra.
56. In I.T.A. No.60/KB of 1988-89 (Assessment Year 1987-88) as well the orders of the learned C.I.T.(A) and the learned D.C.I.T. refusing to set off the assessed loss from the industrial undertaking, qualifying for exemption from tax on profits and gains derived there from, against income assessed from other sources in the same assessment year as provided under section 34 and to carry forward the unabsorbed depreciation or the business loss to be set off against profits and gains from the same business assessable in the succeeding assessment year or years, if any, in accordance with the provisions of section 35 of the Ordinance, are set aside with the directions to set off the assessed loss keeping in view our findings supra. The appeal is allowed in the manner supra.
57. Finally, in I.T.A. No.2494/&of 1991-92 (Assessment Year 1990-91) the impugned order of the learned C.I.T.(A) is confirmed and the appeal at the instance of the Department is dismissed.
58. Thus, two appeals, instituted at the instance of the Department, are dismissed while the remaining appeals, instituted at the instance of assessees, are allowed in the manner indicated supra.
C.M.A./15/Tax(Trib.)Appeals dismissed.