I.T.AS. NOS. 155/KB TO 158/KB OF 1998-99, DECIDED ON 1ST MARCH, 1999 VS I.T.AS. NOS. 155/KB TO 158/KB OF 1998-99, DECIDED ON 1ST MARCH, 1999
1999 P T D (Trib.) 2294
[Income-tax Appellate Tribunal Pakistan]
Before Shahid Jamal, Accountant Member and Tahseen Ahmed Bhatti, Judicial Member
.T.As. Nos. 155/KB to 158/KB of 1998-99, decided on 01/03/1999.
(a) Income Tax Ordinance (XXXI of 1979)---
----Ss.66-A(2), 62 & 132---Powers of Inspecting Additional Commissioner to revise Deputy Commissioner's Order---Limitation---Original order passed by Assessing Officer was appealed against under S.132, Income Tax Ordinance, 1979---Revision by Inspecting Additional Commissioner under S.66-A of the Ordinance---Issue raised by Inspecting Additional Commissioner was not the subject-matter of appeal---Determination of period of limitation---Limitation envisaged in subsection (2) of S.66-A, Income Tax Ordinance, 1979, was to be counted from the date of the original order and not from the revised order under S.66-A, Income Tax Ordinance, 1979.
1998 PTD (Trib.) 1878 ref.
1996 PTD (Trib.) 492 and 1999 PTD (Trib.) 401 rel
(b) Income Tax Ordinance (XXXI of 1979)---
----Ss.12(3) & 66-A---Accrued interest---Powers of Inspecting Additional Commissioner to revise Deputy Commissioner's Order---Accrued interest appeared in suspense account of the balance-sheet---Neither assessee offered same as "accrued income" nor Assessing Officer took notice thereof-- Inspecting Additional Commissioner treated assessment as "escaped assessment" refrained the assessment after including interest credited to suspense account---Validity---Order of Inspecting Additional Commissioner was affirmed by Tribunal after considering various objections that interest credited to suspense account was liable to be taxed on accrual basis and appeals were accordingly dismissed.
1998 PTD (Trib.) 1878 rel./reaffirmed.
CIT v. Fazalur Rehman and Saeedur Rehman 1964 SSC 176; CIT v. Thiagaraja Chetty (KR MIT) & Co. (1993) 24 ITR 525, 530 (SC); National Bank of Pakistan v. I.A.C. I.T.As. Nos.1983, 1984, 1985/KB of 1997-98; 1994 PTD (Trib.) 1051; 1995 PTD (Trib.) 807; Messrs Efahi Cotton Mills Limited v. Federation of Pakistan PLD 1997 SC 582 = 1997 PTD 1555; CIT v. Motor Credit Company (Pvt.) Limited (1981) 127 ITR 572 (Mad.); CIT v. Smt. Vimla D. Sonwane (1994) 73 Taxman 596 (Punj. & Har.); PIA Corporation v. CIT (Central), Karachi 1998 SCMR 872 = 1998 SCC 658; State Bank of Travancore v. CIT (1986) 158 ITR 102; PLD 1997 SC 315 and Black's Law Dictionary, 6th Edn. ref.
CIT v. E.A.E.T. Sundararaj (1975) 99 ITR 226; CIT v. Smt. Vimla D. Sonwane (1994) 75 Taxman 335 (Bom.); Sheikh Khalid Mehmood v. Banking Tribunal, N.-W.F.P. 1997 CLC 1812; United Bank Limited v. M/s. Novelty Enterprises Ltd. PLD 1998 Kar. 199; Godhra Electricity Company Limited v. CIT 1998 PTD 73 and Nishat Talkies, Karachi v. CIT 1989 PTD 591 irrelevant/distinguished.
Ikramul Haq and Jawaid Farooqi for Appellant.
Anisul Hasnain, D.R. for Respondent.
Date of hearing: 20th February, 1999
ORDER
SHAHID JAMAL (ACCOUNTANT MEMBER).---The above four appeals are directed against I.A.C's. order under section 66-A of the Income Tax Ordinance, 1979, dated 20-6-1998.
2. Brief facts giving rise to the above appeals are that the assessee, a banking company in the Nationalized Sector, was originally assessed to tax for all the impugned assessment years under section 62 of the Income Tax Ordinance. In the original assessment, neither the assessee had offered interest credited to Suspense Account as "accrued income", nor the D.C.I.T. had taken notice of it. Thus, accrued income having escaped assessment, I.A.C. subsequently, exercising his revisional jurisdiction under section 66-A, held the orders to be erroneous in law in so far as they were prejudicial to the interests of revenue and reframed all the assessments after including following amounts of interest credited to Suspense Account:
ORIGINALLY ASSESSED INCOME EXCLUDING DIVIDEND
| Asstt Year | Originally assessed income excluding Dividend | Amount of interest credited to Suspense A/c treated as accrued income. |
| 1991-92 | 666,310,345 | 1,500,000,000 |
| 1992-93 | 954,239,891 | 2,195,107,000 |
| 1993-94 | 4,561,050,298 | 1,583,566,000 |
| 1994-95 | 377,669,219 | 4,498,112,000 |
3. It is against inclusion of the said interest credited to Suspense Account, deemed as accrued income, that objection has been taken by the appellant and during the assessment year 1991-92 additional ground has further been taken regarding the proceedings initiated by I.A.C. to be time barred.
4. Mr. lkramul Haq, Advocate, appeared on behalf of the appellant and took various factual and legal objections against the above assessment. We first take up assessment year 1991-92 where the main objection to section 66-A is that it was time-barred.
ASSESSMENT YEAR 1991-92
5. The original assessment in this case was finalised on 21-2-1994. Appeal by learned CIT(A) was decided on 26-2-1996 and the modified order under section 62/132 was passed on 30-12-1997. The learned I.A.C. during the course of inspection of the record noticed that accrued interest credited to Suspense Account was not taxed during the original proceedings and hence considering the assessment to be erroneous in law in so far as being prejudicial to the interests of Revenue issued show-cause notice on 12-6-1998, providing the assessee an opportunity to explain as to why the escaped accrued interest income be not included in the total income and tax be recovered. The assessee responded to the notice taking various legal objections and one of the objections taken was that the limitation for invoking section 66-A had expired by 21-3-1998, four years from the date of original order. The learned I.A.C. did not accept the plea, as in his opinion the limitation was to be counted from 30-12-1997 when revised order was passed under section 62/132, the order having merged with CIT(A)'s order. The other objections taken by the assessee with regard to the inclusion of interest income with particular reference to prudential regulations of State Bank of Pakistan, were also brushed aside by the I.A.C. and reliance was placed on Tribunal's decision referred to 1998 PTD (Trib.) 1878. The assessment was completed on 20-6-1998 after including an amount of Rs.1,500,000,000 indicated above as accrued income and tax was charged.
6. Before us also Mr. Ikramul Haq has pleaded that the limitation under subsection (2) of section 66-A was to be determined from date of the original order and not from the date of the revised order under section 62/132 as alleged by the learned I.A.C. We are inclined to agree with him. The orders sought to be revised is that portion of the order which had not become subject-matter of appeal, the issue of taxability of accrued income, credited to Suspense Account was neither discussed in the original order nor it was subject to appeal before Appellate Authorities. It must be reminded that the jurisdiction of the I.A.C. extends to "any order gassed therein by the Deputy Commissioner is erroneous" and this jurisdiction cannot be extended to portion of the order or issues decided or modified by learned CIT(A). This is very clear from a plain reading of subsection (1-A) of section 66-A which is reproduced below for the sake of clarity:---
"(1-A) The provisions of subsection (1) shall, in like manner, apply,---
(a) where an appeal has been filed under sections 129, 134 and 137, or an appeal has been filed under section 136, against an order passed by the Deputy Commissioner; and
(b) where an appeal referred to in clause (a) has been decided, in respect of any point or issue which was not the subject-matter of such appeal. " '
7. Subsection (1-A) reproduced supra was inserted by Finance Act, 1991 with a view to extend I.A.C.'s jurisdiction over those cases also where appeals had been filed or decided, and Assessing Officer's orders had merged into Appellate Authorities order, and due to overwhelming consensus of judicial pronouncements, there was no order in the field for the I.A.C. to Exercise Jurisdiction. The theory of merger has more recently been discussed by the Appellate Tribunal in cases reported as 1996 PTD (Trib.) 492 and 1999 PTD (Trib.) 401. Both the reported judgments have made it clear that I.A.C's. jurisdiction extends only to that portion or issue of assessment order which was not the subject-matter of the appeal and thus the limitation envisaged in subsection (2) of section 66-A is to be counted from the date of the original order and not from the revised order. In view of this matter we are in complete agreement with Mr. Ikramul Haq and I.A.C.'s action being time-barred, the assessment completed under section 66-A is cancelled.
ASSESSMENT YEARS 1992-93. 1993-94 AND 1994-95
8. As the grounds are common, all the three appeals are taken up simultaneously. Mr. Ikramul Haq has taken several legal and factual objections, which we propose to discuss cane by one.
9. His first objection was that I.A.C. took the action placing reliance on the ratio of decision in the case reported as 1998 PTD (Trib.) 1878 and nothing else. The said judgment was not part of the "record" and to reinforce his arguments as to what the word 'record' meant, he has cited before us the ratio of decision contained in a reported case of the Tribunal as 1990 PTD (Trib.) 914. In the judgment the Hon'ble Tribunal examined the facts of M/s. Ganga Properties v. I.T.O. (1979) 118 ITR 447 (Cal. H.C.) which were, briefly stated, that the assessee had declared sale value of various plots at Rs.7,51,512. Since the assessment was getting time-barred, the I.T.O. accepted the value declared subject to determination of its value by the valuer. Relying on the subsequent report of the valuer, the I.A.C. issued notice under section 263 of the Indian Income Tax Act, equivalent to section 66-A of the Income Tax Ordinance, for the reason that the sale value of the properties accepted at Rs.7,51,512 as against Rs.10,85,250 reported by the valuation officer was erroneous and prejudicial to the interests of revenue. It was contended by the assessee before the Lordship of Calcutta High Court that in section 262(1) of the Indian Income Tax Act, the words used are; "is erroneous" and not the words "has become subsequently erroneous". Their Lordships of the Calcutta High Court, accepting the plea of the assessee, were pleased to observe that materials which were not in existence at the time of assessment, and came into existence afterwards cannot form part of the record of the proceedings, for invoking jurisdiction. Further, the enquiries deemed necessary, referred to in the said section, may be initiated only when the jurisdiction to Exercise revision of the order is proper and legal. The learned Tribunal following the ratio laid down in above decision in para. 10 of the reported case held that the material available with the I.T.O. was to be considered as record. Since in this case Tribunal's judgment reported as 1998 PTD (Trib.) 1878, on which the I.A.C. placed reliance was not part of the record at the time D.C.I.T. passed the order. It could not be made the basis for the exercise of jurisdiction.
10. Mr. Anisul Hasan Moosvi, responding to the argument submitted that it was not correct that I.A.C. had invoked his jurisdiction merely on the basis of reported judgment. In fact after examination of the Audited Accounts and the balance-sheet he had noticed that interest credited to Suspense Account was not taken into consideration by the Assessing Officer at the time of assessment. He said the judgment was cited by D.C.I.T, only to reinforce his argument regarding taxability of the accrued interest. We have considered the arguments of both the parties. We are afraid we cannot persuade ourselves to agree with the contention of Mr. Ikramul Haq. The accounts appended to the return of income were the part of the record which the I.A.C. had inspected and noticed accrued interest appearing in the Suspense Account of the balance-sheet, but did not find the corresponding entry in the P&L Account. It thus, occurred to him purely on the basis of material available before D.C.I.T., that accrued interest had escaped assessment. This inference was clearly deducible from the record of the assessment, and not something extraneous to the record. The I.A.C. formulated his opinion and in the process of the formulation of the opinion, he was naturally inclined to look for such citations or decisions which would fortify his opinion. If one relies on any latest judgment for the reinforcement of his view it cannot be said that such a reference or reliance is contrary to record of the assessment. It would really be an absurd proposition that while formulating opinion and during the process of consideration, one should shut his mind and the thought process should be suspended or limited to the point of time at which original assessment was completed. It must be remembered that I.A.C. is not only to "examine the record", but also to consider and the word "consider' means, according to Black's Law Dictionary, "to fix the mind on with a view to careful examination, to examine, to inspect, to deliberate about and ponder order, . . . ". The examination is restricted to the record, but when one considers, he takes into view the different and various perceptions, nuances and meaning thesis and anti-thesis and it is from such contours of synthesised thought-perception that an opinion is formed. However, after formulation of opinion, one wants to be satisfied and reassured about the opinion formed, and in this context judicial pronouncements and precedents are sought. In the very case relied upon by the appellant, 1990 PTD (Trib.) 914, the learned Tribunal has elaborated the word "consider"
"In my view, when a fact is brought from my subconscious part to the conscious part of the mind it is said that I 'think' about it. However, if fantasy is added to my thinking it would be said that I am 'imagining'. But, if I add reasoning faculty to my thinking, it is said that I am 'considering'. On the other hand, if after considering I arrive at some conclusion and express it, it is said to be my 'opinion'. However, when my opinion reaches the stage of my personal conviction, it is said that 'I am satisfied'.
11. Following the sequence of actions, set out in the Tribunals' order, reported supra, the learned I.A.C. first examined the case record i.e. the available record before him and after examination of the record formulated his opinion about taxability of the said interest income and in order to fortify his opinion he further placed reliance on the ratio of decision cited as 1998 PTD (Trib.) 1878. It is incorrect to say that he first formulated in opinion and then examined the record. Further, the facts of this case are different from those reported and relied by the appellant's counsel in both the reported cases supervisory officer had relied on material which was obtained subsequently, after the completion of assessment in the case of Ganga Properties v. I.T.O. The I.A.C. had relied on valuation report obtained after the assessment had been completed and in the case before the Tribunal referred above also the I.A.C. had relied on enquiry reports subsequently, conducted in respect of the verification of the purchases, whereas in this case interest credited to the Suspense Account was part of the balance-sheet from the date on which the return of income was filed and it was this evidence which was considered by the I.A.C. and it was not extraneous nor was obtained by the I.A.C., therefore, Mr. Ikramul Haq's contention is dispelled on this count.
12. His next submission was that the learned I.A.C. neither provided him proper opportunity nor heard him properly, as he failed to take into cognizance several case-laws cited before him and in this connection he referred us to a case-law namely CIT v. Fazalur Rehman and Sayeedur Rehman reported as 1964 SSC 176. In this case the Supreme Court of Pakistan has reaffirmed the Maxim "no man can be condemned without hearing" and that this maxim extends to all proceedings including Income-tax proceedings. Now referring to I.A.C.'s orders; we have noted that he had provided proper opportunity by show-cause notice, dated 12-6-1998 and had also taken notice of the reply given by the appellant. He has not discussed all the cases in detail as he has picked up the main argument on which the appellant was trying to defend his case i.e. he was prevented by Prudential Regulation No.VIII of the State Bank of Pakistan to credit such interest to P&L Account. We, therefore, have no hesitation in reaching the conclusion that not only that opportunity was provided to the assessee but also the appellant was heard by the I.A.C. It is further understandable that the I.A.C. was in no position to overrule the judgment of the Tribunal.
13. The next argument advanced on behalf of the appellant was that he had maintained a regularly employed method of accountancy and the method so employed permitted him to report some transactions on receipt basis. For this he referred us to the decision in the case of CIT v. Thiagaraja Chetty (KR MIT) & Co. reported as (1993) 24ATR 525, 530 (SC). We have referred to the citation. In this case the assessee, a Registered firm, had a Managing Agency agreement with a Limited Company namely Shri Meenakshi Mills Ltd. and under the terms of the agreement the Agents were entitled to a certain commission on purchases and sales. For the assessment year 1942-43 the Agents became entitled to Commission of Rs.2,26,850 but did not show it in the return of income on the plea that the said sum was not actually received. The I.T.O. did not accept this plea and holding that the assessee was maintaining accounts on mercantile basis, treated the commission as accrued income and taxed it. It may be mentioned here that the said sum of commission was allowed as deduction in the case of Limited Company and question arose, in the case of the assessee, whether accrued commission, already allowed as incurred expense in the hands of the Company, was liable to be treated as income. The matter was considered by the Supreme Court which held as under:---
"There can be no doubt under the circumstances that the aforesaid sum was income which had accrued to the firm. The only question is whether the aforesaid sum ceased to be income by reason of the fact that on the 30th March the sum was carried to the Suspense Account by a resolution of the directors as a result of a request made by the firm that outstanding debt due from it may be written off. It is true that the sum was not drawn by the firm but that can hardly affect the question of its liability to tax once it is established that the income had accrued or arisen to the firm. The mere fact that the company was withholding payment on account of a pending dispute cannot be held to mean that the amount did not accrue to the firm. "
13. The above citation does not help the appellant's case in any way. The appellant had relied on an observation made by the Supreme Court on the first question having been referred to the said Court which was whether there was any material for the Tribunal's finding that the appellant's (respondents in this case) were being assessed on cash basis in the prior years. It was with reference to this question that the Supreme Court observed that "any one familiar to commercial transaction knows that even in accounts kept on mercantile basis there can be entries of cash credits and debits. We see no flaw in the conclusion reached by the High Court on the first question." It may be emphasised that in spite of the observation above the Hon'ble Supreme Court had held the commission income to have accrued and liable to tax in that case. On this point reliance was also placed on two other case-laws namely CIT v. E.A.E.T. Sundararaj (19751 99 ITR 226 and CIT v. Smt. Vimla D. Sonwane (1994) 75 Taxman 335 (Bom.). In the first case the issue before the Madras High Court was whether collection of sales tax, maintained by a separate account on cash basis of the excess of sales tax over the liability payable to the Government, was includible in the income of the assessee. It was in this context and to this question that the High Court had held that "An assessee may employ one method of accounting for one part of his business or one class of customers, and a different method for another part of his business or another class of customers. He may also keen accounts in respect of different parts of the same business on different basis. If such different methods are employed regularly and consistently the nr0fits have to be computed in accordance with the respective methods provided it results in a proper determination of the true profits." In the other case, that of Smt. D. Sonwane the question before the Hon'ble High Court of Bombay was whether the assessee's lease income on accrual basis, could be included in income for the period during which proceedings for fixation of standard rent were pending in Court. The I.T.O. in that case had added the lease money in the total income on accrual basis. The learned High Court held that under the circumstances the lease income could not be taxed on accrual basis. As such income was to be assessed on receipt basis as the assessee had income from other sources and was not maintaining any books of accounts. The two cases cited are again distinguishable, the first case was a case of sales tax collection payable to the Government, the collection was sought to be a Trust on behalf of the Government and it was in this context that the High Court had referred to case and mercantile methods of accountancy. In the second case books of accounts were not maintained and the question of taking the income on accrual basis did not arise.
14. On being questioned as to what the method of accountancy the assessee had employed or was regularly employing, Mr. Ikramul Haq was non-committal. He did not categorise the accounting as mercantile or cash or even hybrid. He said these terms had become obsolete and were mere jargons and now an International method of accountancy had emerged. He referred us to International Accounting Standard ----IAS 18 (Revised 1993) which says: "Revenue is recognised only when it is probable that the economic benefit associated with the transaction will flow to the enterprises, " placing reliance on this standard, he submitted that accrued interest credited to Suspense Account could not be: recognized as revenue because its benefit is most improbable to flow to the appellant.
15. The Departmental Representative, on the other hand, submitted that the plea taken by the appellant regarding the method of accountancy employed is factually incorrect as assessee had consistently followed mercantile principles of accountancy, subject to prudential regulations, which itself required mark-up interest to be recorded on accrual basis; that accrued interest on 'sticky loans' to be credited to Suspense Account was for the purposes of proper regulation and a record and it was not in any way intended to either effect the principles of accountancy or to have bearing on taxation. He further argued that the reliance placed on the decision of CIT v. Thiagaraja Chetty (KR MIT) & Co. (1993) 24 ITR 525, 530 (SC) was misplaced. The facts of the case have already been discussed above. To recapitulate briefly, the facts stated were that the assessee had earned Managing Agency Commission on accrual basis which was claimed as incurred expenses by the paying company and was allowed as deduction in his case. The income, however, was not offered by the assessee but taxed by the Income-tax Authorities on mercantile principles. The Tribunal had given a finding, that the assessee was being assessed on cash basis in the previous years and hence the accrued commission was not assessable in his hands. The High Court did not find any material to substantiate this fact and when the case came before the Lordships of the Supreme Court, the apex Court confirmed that the accrued income was assessable in the hands of the assessee, although it was in this reference, that the Court also observed that a mere reference to certain transactions on cash basis would not change the method of accounting from mercantile to cash. The two cases referred supra i.e. the case of CIT v. E.A.E.T. Sundararaj (1975) 99 ITR 226 (Mad.) and CIT v. Smt. Vimla D. Sonwane (1994) 75 Taxman 335 (Bom.) also do not promote the case of the appellant as the facts in those cases already discussed, were totally different. As regards International Accounting Standard, it would be of some interest, if (?) refer to later part of the same citation: "However, when an uncertainty arises about the collectability of an amount already included in revenue, the uncollectable amount or the amount in respect of which recovery has ceased to be probable is recognised as an expense, rattier than as an adjustment of the amount of revenue originally recognised." It has never been the appellant's case that it has not maintained its accounts on mercantile principles, and natural corollary of such a finding of fact has been adequately discussed and decided in the case of National Bank of Pakistan v. I.A.C. in I.T.As. Nos.1983, 1984 and 1985/KB of 1997-98, dated 28-11-1998. Once the admitted position is that the accounts were maintained on mercantile principles accrued income has to be included for the purposes of taxation. We may also refer to section 32(1) of the Income Tax Ordinance which says the income profits and gains except income from dividends, shall be computed for purposes of sections 17, 19, 22, 27 and 30 in accordance with the method of accountancy regularly employed by the assessee. The regularly employed method by the assessee has been mercantile. It may be mentioned that the question of taxability of real income and hypothetical income, or accrued or cash income has been settled with regard to interest on securities and sale of investment by Tribunal's orders reported as 1994 PTD (Trib.) 1051 and 1995 PTD (Trib.) 807 and on that issue too we have not come across any reference or finding to the contrary that accounts were maintained on mercantile principles. As such we are not impressed by the arguments of Mr. Ikramul Haq and the same are repelled.
16. The next plea taken by the appellant was that it was restrained by the prudential regulations of the State Bank of Pakistan to credit the accrued interest on 'sticky loans' to the P&L Account and to offer it for taxation. This was as per section 91-A of the Banking Companies Ordinance, 1962 and section 46-B of the State Bank of Pakistan Act. Section. 91-A bars the application of other provisions contained in the said Ordinance and section 46-B of the State Bank of Pakistan Act, 1956 says that any directive issued by the Government or the Government Agency to a Banking Company or any other financial institution regulated by the State Bank, if inconsistent with the policies, regulations and directives issued by the Bank, was not to be valid. For the sake for proper understanding we consider it appropriate to reproduce two sections "sections 91-A and 46-B", as below:
Section 91-A of the Banking Companies Ordinance, 1962:
"91-A. Application of other laws barred.---The provisions of clauses (dd) (ee) and (gg) of section 5, sections 13, 15-A, 15-B, 15-C, 21, 24, 25, 25-A, 25-B, 26-A, 27-A, 35, 41, 41-A, 41-B, 41-C, 43-A, 43-AA, 43-B, 43-C, 43-D, 43-E, 43-F and 84 shall have effect notwithstanding anything contained in any other provision of this Ordinance except section 91, or in any other law for the time being in force or in any contract, agreement, award, memorandum or articles of association or other instrument. "
Section 46-B of the State Bank of Pakistan Act, 1956:
"46-B. In consistent directives not be issued.---No Government or quasi-Governmental body or agency shall issue any directive, directly or indirectly to any banking company or any other financial institution regulated by the Bank which is inconsistent with the policies, regulations and directives issued by the Bank pursuant to this Act, the Banking Companies Ordinance, 1962 (XII of 1962) or any other law in force."
17. Mr. Ikramul Haq submitted that prudential Regulation No.VIII of State Bank of Pakistan, issued in pursuance to State Bank Act of Pakistan, 1956, directed the Banks working under its control to credit accrued interest to Suspense Account in the balance-sheet and not credit to P&L Account. These directions issued under section 41 of the Banking Companies Ordinance, 1961 read with section 91-A of the said Ordinance override "any other law for the time being in force including, Income Tax Ordinance. 1979 (emphasise appellant). Section 32(3) of the Income Tax Ordinance, he submitted being inconsistent with prudential Regulation No. VIII "read with sections 91-A and 41 of the Banking Company Ordinance, 1962, had to yield and in this respect, he referred us to the decision in the case of M/s. Ellahi Cotton Mills Limited v. Federation of Pakistan reported as PLD 1997 SC 582 = 1997 PTD 1555 and Sheikh Khalid Mehmood v. Banking Tribunal N.-W.F.P. reported as 1997 CLC 1812. We have referred to the said decisions. In both these cases it has been held that in a situation where two different enactments were in conflict or inconsistent with each other, the later or the more specific provision Will prevail. In the case of Ellahi Cotton Mills (Pvt.) Ltd. the Honourable Supreme Court held that Act 12 of 1992 giving exemption to certain class of tax-payers was more specific and later in date and hence it was to prevail over section 80-D of the Income Tax Ordinance, 1979 which was enacted by Finance Act, 1993. In the case of M/s. Khalid Mehmood v. Banking -Tribunal, N.-W.F.P. where the Bank had started recovery proceedings and the defaulter had, in the meanwhile obtained rescheduling of the loan, and the instalments from Ombudsman, and the Bank had taken up the proceedings before the. Banking Tribunal for decree of the recovery of total demand, the question before the Court was as to which proceeding were legal and "it held that Banking Tribunal having been established in 1984 and its enactment being subsequent to the establishment of Ombudsman's Office, it was to prevail. Drawing inference from the two reported decisions, discussed supra Mr. Ikramul Haq maintained that accounts presented in pursuance to Prudential Regulation No, VIII of the State Bank of Pakistan was to be accepted by the Tax Authorities.
18. Responding to this argument Dr. Tariq Masood who appeared to assist the D.R., submitted that it was totally incorrect that the Prudential Regulations had required the Bank not to offer the accrued interest for tax purposes, the said directions were only to regulate the record keeping and presentation of accounts, such directives had no bearing on the incidence of taxation. He drew our attention to all the sub-clauses referred to section 91-A and submitted that a bare perusal of the clauses mentioned therein would show that no protection, as has been mentioned, has been given to section 34 of the Banking Companies Ordinance, 1962 which deals with preparation of accounts and presentation of balance-sheet, He further drew our attention to section 2 of the said Ordinance which reads as under:---
"Application of other laws not barred.---The provision !of this Ordinance shall be in addition to, and not, save as hereinafter expressly provided, interrogation of, the Companies Act. 1913 (VII of 1913), and any other law for the time being in force.'
19. Since the Banking Companies Laws and Regulations and relevant section of the Income Tax Ordinance such as sections 32 and 22 and are neither in conflict nor inconsistent, the question of prudential laws prevailing over the charging provisions of Income Tax Ordinance does not arise. We have considered the arguments on this issue from both sides. The relevant provisions of Banking Companies Ordinance and prudential Regulations nowhere debar the appellant bank from offering the accrued income to tax, though they have prescribed a certain method of presentation of the accounts for their purposes, the purpose being to keep the classified loans as different and identifiable category. None of the laws or regulations we have referred to, have expressly provided that accrued interest is not to be debited to Debtors Account, which as soon as the entry is passed, simultaneously creates the legal right to receive the interest, the only question being to enforce the right, whereas section 32(1) of the Income Tax Ordinance says that revenue shall be recognized and computed in accordance with the method of accounting regularly employed by the assessee, the method being historically mercantile. In such a method there is no escape from taxation of the accrued income, at the same time there is facility of recognition of an expense accrued but not paid. In our considered view the provisions of section 91-A of the Banking Companies Ordinance, 1962 section 46-B and Prudential Regulation No.VIII do not possess any inconsistency with the principle of recognition of Revenue in section 11, and computation of income as per sections 32(1); 22, 23 and 24, the 1st Schedule and other relevant provisions, and hence the question of specific law prevailing over the General Law does not arise at all.
20. The next argument taken up by Mr. Ikramul Haq was that the judgment passed by this Tribunal reported as 1998 PTD (Trib.) 1878 as per incuriam as, either due to lack of proper assistance to the Court, or the Tribunal per chance, failing to take notice of several relevant case-laws; and in this connection he cited the following judgments: (1) United Bank Limited v. M/s. Novelty Enterprises Ltd. PLD 1998 Kar. 199; (2) CIT v. Motor Credit Company (Pvt.) Limited (1981) 127 ITR 572 (Mad.), (3) CIT v . E.A.E.T. Sundararaj (1975) 99 ITR 226 (Mad.), (4) CIT v. Smt. Vimla D. Sonwane (1994) 73 Taxman 596 (Punj. & Har.), (5) PIA Corporation v. CIT (Central), Karachi 1998 SCMR 872 = 1998 SCC 658, (6) Godhra Electricity Company Limited v. CIT 1998 PTD 73 = (1998) 78 Tax 28 (SC Ind.), (7) Nishat Talkies, Karachi v. CIT 1989 PTD 591.
U.B.L. v. Novelty Enterprises Ltd.
21. We will briefly refer to the facts and the ratio of decisions in the cases cited supra to see how relevant these are for deciding the issue before us. In the first case, U.B.L. v. Novelty Enterprises Ltd., U.B.L. had filed recovery suit and had claimed principal plus mark-up on the basis of confirmation slips duly acknowledged by the respondent. However, the Banking Tribunal held that under the Islamic Mode of Banking no mark-up could be charged after the expiry of prescribed time. From this case the appellant had tried to distinguish his case from the State Bank of Travancore case where interest was credited on compound rate whereas in his case mark up was regulated, as in the case of U.B.L., as per Islamic principles prescribing specified time and prohibiting compound interest.
CIT v. Motor Credit Co. (Pvt.) Ltd.
22. In this case the assessee, a Private Limited Company, was carrying on business as financiers for purchase of motor vehicles on hire purchase, advanced under hire purchase agreements, monies to two firms which were plying buses. The routes of these two firms having been taken over by State Transport Corporation, the firms defaulted in making payments of the hire purchase instalments, and consequently the buses were seized. The assessee did not credit account for any interest on accrual basis because even the realisation of capital was improbable. The I.T.O. did not accept this plea and taxed the accrued interest on mercantile basis. On appeal, the A.A.C. of the Tribunal deleted the addition holding that it was wholly unrealistic to take credit for a highly illusory interest, and on further appeal on behalf of the revenue, the Hon'ble Madras High Court held that "where no income has resulted it cannot be said that income has accrued merle on the round that the assessee had been following the mercantile s stem of accountingEven if the as makes a debit en t to that effect still no income can be said to have accrued to the assessee. If no income has materialised there can be no liability to tax on a hypothetical income. "
CIT v. E.A.E.T. Sundararaj
23. In this case the assessee was carrying on business of manufacture and sale of fireworks. He had maintained a separate account for collections and payments made towards Central Sales Tax. This separate account maintained for tax showed surplus receipts over payments and this surplus was treated as a part of the turnover by the I.T.O. On appeal, by the assessee the A.A.C. held that surplus indeed was part of the assessee's turnover but while computing income the incurred liability to pay sales tax should also be considered. Being aggrieved by the decision of the A.A.C. the Department filed appeal before the Appellate Tribunal contesting that sales tax collected by the assessee was part of the turnover and that liability to sales tax could be allowed on the basis of actual payment. The learned Tribunal held that sales tax collected by the assessee could not be included in has taxable turnover that such collection was in any case Trust found to be handed over to the Government. On further appeal by the revenue whether the surplus sales tax included assessee's income was liable as income or not the Hon'ble Madras High Court held that the assessee had maintained sales tax account on cash basis and his other accounts on mercantile basis, in that, an assessee may employ one method of accounting for one part of his business or one class of customers, and a different method for another part of his business or another class of customers. The judgment is in no way relevant to the issue at hand.
CIT v. Smt. Vimla D. Sonwane
24. This case has also been discussed above ready reference we may recollect. In this case the assessee was co-owner of some plots which were leased out two different lessees. The lessees of said plots filed proceedings for fixation of standard rent under the Bombay Rent, Hotel and Lodging House Rates Control Act, 1947 in the Small Cause Court, Bombay. The assessee had not maintained regular books of accounts and did not follow mercantile system of accounting, as such she did not offer the rent not received, on accrual basis. However, the I.T.O. added the lease money on accrual basis as per agreed rent. The Tribunal having quashed those additions, the case came up before the High Court of Bombay. The High Court held that assessee has not maintained accounts and the agreed lease money was in jeopardy because of the pendency of proceedings for fixation of standard rent in a Court of Law. Under the circumstances the income from lease rent could not be taxed on accrual basis. This case also does not help the appellant because the facts of the case are distinguishable from those of the appellant and further it was a no account case.
P.I.A. Corporation v. CIT (Central), Karachi.
25. In this case the question for consideration before the superior Courts are whether the money received on account of sale of tickets not utilized had the character of trading receipts. The usual practice of the Airline was to credit the amount to an account called 'unearned Transportation Receipts' and these receipts were shown as trading receipts when the tickets were utilized. During the assessment year 1960-61 assessee transferred an amount of Rs.6,95,171 from "unearned Transportation Receipts" account to P&L Appropriation Account. The I.T.O. treated it as trading receipts. The Income Tax Appellate Tribunal, Karachi Bench and the Sindh High Court affirmed the treatment. The question having been referred to the Supreme Court, the apex Court held "It is nobody's case that the passenger, who had purchased the ticket, had foregone his right to recover the unutilised fare or for that matter the liability of the Corporation to return it, had ceased. Accordingly, the liability continued notwithstanding that its recovery was barred by limitation." It is pertinent to mention here that the addition to income was made under section 10(2-A) of the revealed Income-tax Act, 1922 which dealt with remission or suspension of liability and the amended provision of section 10(2-A) had not come to the notice of the apex Court. The question before Supreme Court, in this case, was whether, on transfer from "unearned Transportation Receipt" to P&L Appropriation Account, the receipt had changed its character from liability to income. To this question the Honourable Court answered that a mere transfer could not change the character of the receipt, relying or an earlier decision in the case EN. Miller.
Godhra Electricity Co. Ltd. v. CIT
26. The facts of this case briefly are that assessee company had increased the rates for supply of electricity and the consumers had filed suits in Court of Law, the suit having been decided in favour of the consumers by the Trial Court. The matter went up to High Court which held that under Electricity Supply Act, 1948 as amended in 1956 the assessee Company entitled to enhance the charges unilaterally subject to the conditions prescribed in the Sixth Schedule to the said Act. This judgment of the High Court was affirmed by Supreme Court by its judgment, dated February 26, 1969. During the pendency of this litigation the assessee company did not realise the enhanced charges from the consumers. However, during the assessment year 1969-70, the I.T.O. included an amount of Rs.7,33,676 on the ground that since the Supreme Court had given decision in favour of the assessee, the assessee company had the legal right to recover the said amount on the basis of mercantile system of accounting which was consistently followed by the assessee. The addition made to income on account of principles of accrual was deleted by the A.A.C. and the learned Income Tax Tribunal. On appeal, by the revenue, the High Court, however, held that the assessee had the legal right to recover the charges and hence the addition was sustainable. On reference by assessee the Supreme Court held that even though the assessee-company was following the mercantile system of accounting and had made entries in the books regarding enhanced charges, no real income had accrued to the assessee company, as it could not have ignored the directive of the State Government. The case is distinguishable by its peculiar facts, the enhanced changes were contested by the consumers and even after decision of the Supreme Court the consumers had made the representation to the Minister of Industries, Mines and Powers, Government of Gujarat, requesting him to issue directive for maintaining status quo and non-implementation of Supreme Court decision. On the basis of such directive the consumers had not paid the enhanced rate and further referred the matter to the Court and had further filed another suit against the decision of Supreme Court on the ground that the circumstances had changed and decision of the Supreme Court had practically no bearing on the changed circumstances.
Nishat Talkies, Karachi v. CIT
27. The facts of this case were that petitioner was running a Cinema House at Karachi known as Nishat Talkies. He realized a sums of Rs.3,86,345 and Rs.3,48,381 during the assessment years 1975-76 and 1976-77 as entertainment duty and these receipts were claimed as exempt. The I.T.O. held it to be liable to tax and included in income. On appeal, the learned Income-tax Appellate Tribunal held it to be exempt on account of receipts not being the trading receipts. The decision of the Tribunal was accented by Department as no further reference was filed. The same treatment was given during the assessment year 1977-78 by the Department but during this year the Income-tax Appellate Tribunal took a contrary view and held it to be a trading receipt liable to tax. The petitioner challenged this order of the Tribunal in the High Court which was decided in favour of the petitioner. However, treating the Income-tax Tribunal's decision as "definite information", the I.T.O. reopened previous assessments of assessment years 1975-76 and 1976-77 under section 65 of the Income Tax Ordinance, 1979 and brought entertainment duty to charge of tax. The petitioner challenged the validity of the re-assessment before the High Court. The question before the High Court was whether, on facts and circumstances of the case, the learned Income-tax Appellate Tribunal could take a view contrary to the view expressed earlier and whether the assessment could be reopened on the basis of later decision. The High Court then referred to several decisions of the Indian and Pakistani Courts on the same issue and found that in India, it was pretty-settled that view taken by an authoritative decision was sufficient information to warrant reopening of assessment, whereas the judicial authorities in Pakistan had taken a contrary view. Under the circumstances the Sindh High Court following the ratio of decisions in the case of I.T.O. Central Circle, Karachi v. Cement Agency (Pvt.) Ltd. PLD 1969 SC 322. Wherein the learned apex Court has held that assessment which had attained finality by way of judicial pronouncement, could not be reopened on the basis of a subsequent decision, held that assessments could not be reopened, and that decisions of Pakistan Courts were binding.
28. We do not see how the cases supra are relevant to the case of the appellant, because the issue involved i.e. taxation of interest credited to Suspense Account was not discussed in any of the cases referred above and the assessment had not attained finality in so for as this point was involved. All the cases cited supra evolve round their own facts and circumstances and the ratio of judgments can be applied only when the facts and circumstances are similar. Case-laws emanate from facts, facts cannot be construed from case-laws, and the ratios laid down have to be examined in totality---and the totality of facts in this case are materially differed from the above cases. We will discuss more of this in the following paras.
29. The last objection of Mr. Ikramul Haq was that the judgment of the Tribunal on the basis of which proceedings were initiated in this case reported as 1998 PTD (Trib.) 1878 was per incuriam, both on factual and legal grounds as distinguishing facts and legal pronouncements to the contrary were not brought to the notice at the Court. He submitted that the learned Tribunal had while reaching its decision following the ratio settled in the case of State Bank of Travancore v. CIT (1986) 158 ITR 102, hereinafter referred as the Indian judgment whereas his case was not "on all fours" with the said Indian judgment. The said Indian judgment according to him revolves on the interpretation of section 36(1)(vii) read with section 36(2) of the Indian Income Tax Act, 1961 which corresponds to section 10(2)(xi) of the repealed Act, 1922. These provisions are not par value, comparable, pari passu or co-extensive with the provisions contained under section 23(1)(x) of the Income Tax Ordinance, 1979. In order to elucidate his argument, section 36(1) and section 36(2) of the Indian Income Tax Act, 1961 and section 23(1)(x) of the Income Tax Ordinance, 1979 are reproduced below:---
Section 36(1)(vii) read with Section 36(2) Indian Act,
The deductions provided for in the following clauses shall be allowed in respect of matters dealt with therein in computing the income referred to in section 28.
Section 36(1)(vii): Subject to the provisions of subsection (2), the amount of any debt, or part thereof, which is established to have become a bad debt in the previous year. "
Section 36(2): In making any deduction for a bad debt or part thereof, the following provisions shall apply---
(i) no such deduction shall be allowed unless such debt or part thereof--
(a) has been taken into account in computing the income of the assessee of that previous year or of an earlier previous year, or represents money lent in the ordinary course of the business of banking or money-lending which is carried on by the assessee, and
(b) has been written off as irrecoverable in the accounts of the assessee for that previous year;
(ii) if the amount ultimately recovered on any such debts or part of debt is less than the difference between the debt or part and the amount so deducted, the deficiency shall be deductible in the previous year in which the ultimate recovery is made;
(iii) any such debt or part of debt may be deducted if it has already been written off as irrecoverable in the accounts of an earlier previous year, but the I.T.O. had not allowed it to be deducted on the ground that it had not been established to have become a bad debt in that year;
(iv) where any such debt or part of debt is written off as irrecoverable in the accounts of the previous year the I.T.O. is satisfied that such debt or part became bad debt in any earlier previous year not falling beyond a period of four previous years immediately preceding the previous year in which such debt or part is written off, the provisions of subsection (6) of section 135 shall apply."
Section 23(1)(x) of the Income Tax Ordinance. 1979:
"(x) in respect of bad debts, such amount (not exceeding the amount actually written off by the assessee) as may be determined by the Deputy Commissioner to be irrecoverable."
30. By referring to the above provisions Ikramul Haq tried to establish before us that under section 36(2) of the Indian Income Tax Act, 1961 bad debts could be considered for deduction only when "the debt or part thereof as taken into account in computing the total income of earlier years and interest becoming due must have given to inflate the profits of the said year", whereas any such condition is missing in the provision contained under section 23(1)(x) of the Income Tax Ordinance, 1979. Mr. Ikramul Haq argued with emphasis that in the provision of the Indian Income Tax Act, 1961 there was explicit directive to take hypothetical income in order to allow bad debts, whereas there was no such statutory command in Pakistan Law. Another distinguishable point, he said was that the State Bank o Travancore was following the interest-based-finance system on stick accounts whereas the banks in Pakistan were following non-interest-based finance system, resulting in income of the account holder/debters in India being credited with compound interest, whereas the accounts of the debtors in Pakistan were allowed a certain mark-up over stipulated period, the difference being that under the Indian Law the accrued interest was continuously being charged without any bar of time limitation, under the Pakistani System of Banking the mark-up could not be charged beyond a certain period. In this context he said that S. B. P. Circulars Nos. 13 and 32 of 1982 on the subject were binding on all the banks, as was also held by the Supreme Court of Pakistan in PLD 1997 SC 315.
31. Dr. Tariq Masood who appeared on behalf of the Department to assist the lear4ed D.R., on the other hand, submitted that the comparative study and analysis of the corresponding provisions in the Indian Income Tax Act, 1961 and Pakistan Income Tax Ordinance, 1979, clearly shows that the principle of taxation of interest on accrued basis has neither been compromised, negated or subordinated. The principle of treatment or recognition of income remains the same. The two provisions have no bearing as far as the principle of computing accrued income is concerned. As regards interest based finance and mark-up based finance, such methods, even if different, have no bearing on the treatment of income, accruing either as compound interest or as mark-up, in both the cases the question being whether such interest or mark-up is to be included in income on principles of accrual or receipt and that question is to be decided with reference to the method of accountancy followed. Dr. Tariq Masood argued in an elaborate manner to show us that the case of State Bank of Travancore, which the Tribunal had followed was on "all fours" with the case of the appellant. He first referred us to dictionary meaning of the words "all fours" and as per Black's Law Dictionary, 6th Addition, "all fours" has been defined as under:---
"Two cases or decisions which are alike in all material respect and precisely similar in all the circumstances effecting their determination are said to be or to run on all fours."
32. Pointing out similarities of the two cases, he said, that (i) both were maintaining accounts on mercantile basis; (ii) both have credited interest on a sticky loan to Suspense Account; (iii) the scope of Income Tax Act, 1961 and section 11 of the Income Tax Ordinance, 1979 were similar; (iv) the question referred to the Supreme Court in the case of State Bank of Travancore was "whether, on the facts and in the circumstances of the case, the addition of the sums of Rs 67 170 R, 47 777 and Rs.57,889 representing income on sticky advances as an income of the assessment years 1965-66, 1966-67 and 1967-68 resQectively was Justified in law" and similar question was posed before the learned Tribunal in the case of Muslim Commercial Bank. Thus, the two cases were, on facts and circumstances similar and the ratio of State Bank of Travancore was rightly followed and, he submitted the facts and circumstances being the same in this case, the same ratio should be followed.
33. We have given our anxious thoughts and consideration to the submissions made by Mr. Ikramul Haq and Dr. Tariq Masood on the question of Tribunal's judgment being per incuriam on factual and legal grounds. As far as the facts and circumstances of the case are concerned, we have no doubt that these were the same in the two reported cases, as also in this case. The method of charging interest either on mark-up basis or on compound interest basis would not make such a difference as to negate the principle of accrual of income,- under both the systems debtors account continue to be debited and Suspense Account is credited, the quantum of accrued interest in the case of interest-based-finance, for obvious reasons, being swelled up and inflated as compared to mark-up system. The difference in quantum will not change the principle. As to section 36(2) of the Indian Income Tax Act, 1961 and the corresponding section in Pakistan Ordinance according to Mr. Ikramul Haq distinctly different, section 23(1)(x) of the Pakistani Income Tax Ordinance, 1979, we do not find it relevant to the question before us and even in the case of State Bank of Travancore, the question before their Lordships was not regarding interpretation of section of 36(2), rather it was accrual of income within the scope defined under section 5 of the Indian Income Tax Act.
The only reference to section 36(2) made in the said judgment was with a view to emphasise that in a situation where income had accrued and assessee had not claimed deduction under section 36(2), there was no escape but to recognize it as revenue. At this stage we cannot resist ourselves from reproducing the relevant portion of the said judgments:
"The concept of reality of the income 1 the actuality of the situation are relevant factors which go to the marking up of the accrual of income but once accrual takes place and income accrues, the same cannot be defeated by any theory of real income. The concept of real income cannot be so used as to make accrued income non-income simply because after the event of accrual, the assessee neither decides to treat it as a bad debt nor claims deduction under section 36(2) of the Act, but still enters the same with a diminished hope of recovery in the Suspense Account. Extensions of the concept of real income to this field to negate accrual after the amount had become payable is contrary to the postulates of the A9t. "
34. Now we can refer back to Mr. Ikramul Haq's plea that the judgment was per incuriam on the basis of legal grounds as several judgments of the superior Courts, both from Pakistan and India were not taken into consideration while reaching the judgment. We have referred to all such cases cited before us supra and have already found that these were distinguishable on facts and circumstances. However, reference to the- citation of some cases is necessary at this stage to once again examine if the ratios are applicable even in a remote sense. The first case which comes to our mind is that of PIA Corporation v. CIT (Central), Karachi 1998 SCMR 872 = 1998 SCC 658. The facts have been discussed above. In this, case the sales of tickets by the P.I.A. was credited to "unearned Transportation Account" and was transferred to revenue account only when passengers had travelled and utilized the tickets. The nature of tickets in this case was akin to promissory note, which was to be recognized at the time of its discharge. Both distinguishing fact in this case is that the said addition was not made on the basis of accrual but on account of expired liability after expiry of three years under section 10(2-A) of the repealed Income-tax Act, 1922. The I.T.O. treated this income only when the liability on account of unutilized tickets was credited to P&L Appropriation Account. Since it was a question of remission of liability section 10(2-A) was attracted to it. The other, relevant case to our mind is that of C.I.T. Taamilnado v. Motor Credit Co. (Pvt.) Ltd., discussed supra. In this case the assessee carrying on business as financiers had advanced sums to two firms which were plying buses, as the routes of the buses were taken over by State Transportation Corporation, the firms defaulted in making payments and assessee did not credit the interest on the out-standings as per mercantile method on the plea that there was no chance of recovering the principal let alone the interest. The I.T.O. had taxed the amount on accrual basis but the A.A.C. and the Tribunal had deleted the addition. On reference made by the Tax Department, the Madras High Court held that accrued interest was not liable to be included an income because it was highly unrealistic and illusory, this judgment was passed on 17-4-1980 whereas judgment in the case of State Bank of Travancore was passed on 8-1-1986 and it is pertinent to mention that the Honourable Supreme Court had considered the judgment of Madras High Court while delivering its own judgment.
35. Another case which is said to have somewhat relevance is that of CIT v. Eastern Investment Ltd. (1974) 73 Taxman 596 (Punj. & Har.). In this case the I.T.O. found that the assessee had not disclosed income on Account of interest on debenture of two Companies, although in the preceding year such interest was taxed on accrual basis. The assessee took the plea that the two Companies whose debentures he was holding were nationalized and operations of all contracts and obligations remained suspended. The I.T.O. did not accept the contention and taxed the amount on accrual basis. On appeal, by the revenue, all the judicial authorities such as Commissioner; Appellate Tribunal and High Court of Calcutta held that under the given circumstances of nationalisation, the right of claiming of interest on debentures had ceased and income was not legally due. Now the facts of this case are materially different. As here the right to receive income itself had extinguished whereas in the case of the appellant there is no such contingency.
36. The other cases which were cited by the appellant's counsel Mr. Ikramul Haq, such as CIT v. E.A.E.T. Sundararaj (1975) 99 ITR 226 (Mad.), CIT v. Smt. Vimla D. Sonwane (1994) 75 Taxman 335 (Bom.), United Bank Limited v. M/s. Novelty Enterprises Ltd. PLD 1998 Kar. 199, Godhra Electricity Company Limited v. CIT 1998 PTD 73 = (1998) 78 Tax 28 (SC Ind.), Nishat Talkies, Karachi v. CIT 1989 PTD 591 and Sheikh Khalid Mehmood Ltd. v. Banking Tribunal, N.-W.F.P. 1997 CLC 1812 are not relevant to the question before us as the facts and circumstances of those cases are not even remotely referable to the point in the issue. We are, therefore, not only convinced but reassured that the judgment given by the Tribunal, on this issue, reported as 1998 PTD (Trib.) 1878 was not only B right but is also fully applicable to this case and, therefore, respectfully following the decision, we reaffirm that interest credited to Suspense Account is liable to be taxed on accrual basis and hereby dismiss all appeals of the appellant.
C.M.A./26/Tax/(Trib.) Appeals dismissed