(a) Interpretation of statutes---

----Exemption clause---Interpretation of---Exemption given by statutes could not be stretched so as to enlarge its scope but that requires strict application against the person who claims exemption---Person or property claiming exemption must come clearly within the language apparently granting the exemption.

I.T.A. No.256/KB of 1997-98; PLD 1988 SC 370 and 161 SC 134, 145 S.Ct. 456, 40 L Ed. 645 rel.

(b) Wealth Tax Act (XV of 1963)---

----Second Sched., cl. 12(2)---"Shop"---Exemption---Requirements.

The following are the requirements for exmption:

(a) It is to be for one shop.

(b) The shop must be owned and occupied by the assessee himself; and

(c) The purpose should be conducting own business therein.

(c) Wealth Tax Act (XV of 1963)---

----Second Sched., cl.12(2)---"Shop"---Definition---Shop is a place where goods are offered for sale---Place that comprises various rooms or various sections are not to be considered as a 'shop'.

Law Dictionary of Words and Phrases Judicially Defined by Dr. A.R. Biswas, p.604 distinguished.

The Concise Oxford Dictionary, 9th Edn., p.1281 ref.

Webster's New Dictionary, Second College Edn., p.1316 rel.

(d) Wealth tax---

---- Professional activities---Business activities---" Professional activities" -are covered under "business activities "---Any kind of commercial activity tele scoped to professional ought to be understood as a "business".

(e) Wealth Tax Act (XV of 1963)---

----Second Sched., c1.12(2)---C.B.R. Circular No. 14(4)/Income-tax/W. Tax, dated 21-8-1979---Exemption---Shop---Claim of exemption of workshop, Shadi hall, hospital, school, property owned and occupied for professional requirements etc. by considering same to be a shop in its wider meanings-- Rejection .of such claim by department on the ground that word 'shop' as used in exemption c1.12(2) of Second Sched. of the Wealth Tax Act, 1963 should not be given wider meaning and, being exemption clause, the principle of strict interpretation should be adopted---Validity---' Shop' to be a part of establishment and an establishment includes a clinic, a hospital, a marriage hall, manufacturing shop, a factory where a mechanic peruses his trade, but none of them was covered by the word 'shop' as used in Wealth Tax Act, 1963---Word 'shop' means a place where goods or merchandise were kept for sale to consumers usually in small quantities on retail, and/or wholesale basis---Word used in cl.12(2) of Second Sched of the Wealth Tax Act, 1963 being 'one shop', if any of the activities claimed for exemption was done by the assessee. in two or more shops, he shall be entitled to the exemption of one only and Motor mechanic workshop, a factory, a departmental store; a doctor's clinic, a hospital, a marriage hall, cinema hall. a school or such other educational institutions were not a 'shop' within the meanings of c1.12(2) of the Second Sched. of the Wealth Tax Act, 1963.

Webster's New Dictionary, Second College Edn., p.1316; Heyden's case (1584) 3 Co. Rep. 70; Estates Ltd. v. Asher (1949) 2 KB 481 and PLD 1968 SC 154 rel.

1999 PTD (Trib.) 2283 and Law Dictionary of Words and Phrases Judicially Defined by Dr. A.R. Diswas, p.604 distinguished. .

I.T.A. No.256/KB of .1997-98; PLD 1988 SC 370;. (1997) 4 SC 203; PLD 1982 Lah. 318; AIR 1923 Lah. 209; Christopher Barker & Sons v. Commissioners of Inland Revenue (1919) 222 King's Bench Division; (1969) 74 ITR 94; Commissioner of Income-tax, Tamil Nadu-IV v. Dr.V.K. Ramachandran (1981) 128 ITR 727; (1981) 129 ITR 295; (1975) 32 Tax 273; 1988 PTD (Trib.) 6; 161 SC 134, 145 S.Ct. 45'6, 40 L.Ed. 645; Construction of Statutes by Earl T. Crawford, 1940; Beck v. Smith (1836) 2 MW 191; Abdul Majid Khan v. Chief Settlement and Rehabilitation Commissioner PLD 1968 SC 154; Divisional Superintendent, P.W.R. v. Bashir Ahmad PLD 1973 SC 589; Rab Nawaz v. Jahana PLD 1974 SC 210; Maxwell on Interpretation of Statutes, 12th Edn., p.40; 1992 SCMR 2351 and The Concise Oxford Dictionary, 9th Edn., p.1281 ref.

Dr. Ilyas Zafar and G. Abbas Chatha for Appellant (in W.T.As. No. 411/LB and 412/LB of 1999).

Shafqat Mehmood Chohan, L.A. and Imran Raza Kazmi, D.R. for Respondent (in W. T. As. No. 411/LB and 412/LB of 1999).

Shafqat Mehmood Chohan, L.A. arid Imran Raza Kazmi, D.R. for Appellant (in W.T.As. No.622/LB and 623/LB of 1998).

Siraj-ud-Din Khalid for Respondent (in W.T.As. Nos.622/LB and 623/LB of 1998). .

M. R. Farooqi, I.T.P. for Appellant (in W.T.A. No.921/LB of 1998).

Mst. Talat Altaf, D.R: for Respondent (in W.T.A. No.921/LB of 1998).

M. R. Farooqi, I.T.P. for Appellant (in W.T.A. No.920/LB of 1998):

Shafqat Mehmood Chohan, L.A. and Imran Raza Kazmi, D.R. for Respondent (in W.T.A. No.920/LB of 1998).

Habib Fakharud Din, F.C.A. for Appellant (in W.T.A. No.404/LB of 1997-98).

Shafqat Mehmood Chohan, L.A. and Imran Raza Kazmi, D.R. for Respondent (in W.T.A. No.404/LB of 1997-98).

Hafiz Muhammad Idrees for Appellant (in W.T.As. Nos.912 and 913/113 of 1998-99).

Shafqat Mehmood Chohan, L.A. and Imran Raza Kazmi, D.R. for Respondent (in W.T.As. Nos.912/LB and 913/LB of 1998-99).

M. Aslam Anwar for Appellant (in W.T.As. Nos.248/LB and 249/LB of 1998-99):

Shafqat Mehmood Chohan., L.A. and Imran Raza Kazmi, D.R. for Respondent (in W.T.As. Nos.248/LB and 249/LB of 1998-99).

Muhammad Nazir Shad and Shahid Abbas for Appellant (in W.T.A. No. 624/LB of 1999)

Shafqat Mehmood Chohan, L.A. and Imran Raza Kazmi, D. R. for Respondent (in W.T.A, No.624/LB of 1999).

Shafqat Mehmood Chohan, L.A. and Imran Raza Kazmi, D.R. for Appellant (in W.T.A. No.585/LB of 1998-99). .

Syed Nazar Hussain Bokhari for Respondent (in W.T.A.. No.585/LB of 1998-99).

Iftikhar Ahmed Khan for Appellant (in W.T.As. Nos:1281/LB and

Shafqat Mehmood Chohan, L.A. and Imran Raza Kazmi, D.R. for Respondent (in W.T.As. Nos. 1281/LB and 1282/LB of 1998).

Date of hearing: 8th June, 1999.

ORDER

KHAWAJA FAROOQ SAEED (JUDICIAL MEMBER). ---The Full Bench has been constituted to resolve the dispute regarding interpretation of the word 'Shop'. The problem arose on an amendment in law introduced by the legislature in clause-12 of the Second Schedule of the Wealth Tax wherein a new clause was inserted as 12(2) which is as follows:---

Clause 12(2).--- "One shop owned and occupied by the assessee for the purpose of his own business."

The situation further aggravated when the Central Board of Revenue through its circular explained that the meanings of word 'Shop' may be adopted as per ordinary dictionary meanings. The taxpayers therefore, started claiming all and every business and professional premises to be as exempt. Since the issue relates to various types of businesses and professional premises, it will be more appropriate to decide the same separately in respect of each of them:--

Mrs. Shamim Asghar W. T. As. Nos.411 and 412/LB of 1999

2. The brief facts of the impugned case are that the appellant owns a workshop at Plot No. 18 commercial area of the main Cavalry Ground, Lahore Cantt The total area of plot is 6 Marlas and covered area of workshop is 1350 sq.ft. The assessee is doing manufacturing activities in this plot and she has claimed it as exempt on account of self-occupation for business during the assessment year 1996-97 which was earlier allowed. However, subsequently the case was reopened under section 17 and the Assessing Officer disallowed the claim of exemption. In appeal it was pleaded that the Assessing. Officer should have accepted the declared version as per direction of C.B.R. contained in Circular- 14(4)/Income tax/W.Tax/79, dated 21-8-1979. It was further argued that the workshop falls within the definition of 'Shop'. Reliance was placed on the judgment of the Supreme Court wherein the Apex Court while dealing with the issue under Rent Restriction Ordinance defined the same. The Hon'ble Supreme Court in the said judgment noticed that the definition of 'shop' has different meanings in different dictionaries. It was further held that term 'shop' is a broader connotation and would cover a place in which manufacturing or repairing activities are done. The learned first appellate authority, however, was not convinced from the definition given in the referred judgment. It was basically for the reason that the same was in respect of Rent Restriction Ordinance and not with reference to income tax or wealth tax. The learned C.I.T(A) also observed that the exemption for self-occupied shop was granted in view of long outstanding demand by the traders and it was meant for the medium scale business and not for factories and bigger business houses. The learned CIT, therefore, held that the shop would mean building, room etc. for retail sale of some commodities/services and for this purpose his reliance was on Concise Oxford Dictionary. He further put reliance on various other dictionaries wherein following definition was given:---

The Concise Oxford Dictionary page 1121.

(1) A building, room etc. for the retail sale of goods or services (Chemist's shop) a place in which manufacture or repairing work is done; a workshop (engineering shop).

New Webster's Dictionary 174.

.....a building in which mechanics work; one's special business

The Compact Edition of the Oxford English Dictionary.

(1) A house or building where goods are made or prepared for sale and sold (2) A building or room set-apart for the sale of merchandize.

(3) A building or room set-apart and fitted up, the carrying on of some particular kind of hand work or mechanical industry; a workshop."

3. Before us the learned A.R. of the assessee Dr. Ilyas Zafar has argued the case at length. He after starting the arguments that since the word "shop" has not been defined in the Wealth Tax Act, dictionary meanings shall apply, produced a large number of dictionaries. In his opinion every building, room and other premises, which is covered in any of the dictionary meanings is 'Shop' and as such exempt.

4. Further, reliance has been placed by him on the judgment of Division Bench Karachi I.T.A. No.256/KB/1997-98, dated 7-9-1998.

5. It is said that though the learned Tribunal has considered only a few definitions of ' Shop' f however, the result arrived at is very correct. He said that the 'workshop' is more akin to 'shop' than of a school hence is fully covered under the definitions given by him as well as in the judgment, mentioned.

Mrs. Shamim Asghar.

6. Mr. Ahmed Ali who was also counsel in the above case firstly adopted the earlier arguments and then added that in his opinion everybody who is being assessed under section 22 in his personal premises is coveted under the definition of shop. He said that section 22 of the Income Tax Ordinance creates a charge on the income, from business or profession and it includes all trades, professions associations for specific services, value of any benefit or perquisites arising from business or exercise which is covered under the speculation business. This way he favoured enlargement of the scope of definition of the word 'shop.

7. The learned L.A. who was supporting the case of the Department started his arguments referring basic principle of interpretation that intendments of the legislature should. not be ignored and the letters of law should be interpreted strictly. In respect of exemption clauses he added that the interpretation should be still more restrictive. In support of his contention he referred PLD 1988 SC 370.

8. He further said that the dictionary meanings are applicable only where it is a case of some routine interpretation of an word and not in case of exemption clause. In his opinion while interpreting a exemption clause the dictionary meanings cannot be applied for enlarging its scope. He referred toe judgment reported as 1997(4) SC Page 203. He argued that the safest interpretation, therefore, is the one that restricts the meaning$ and not the one that enlarges its scope. The impugned case, the learned L.A. repeated, is of a workshop wherein repair of motor vehicles is being carried hence cannot be considered as a shop.

He further said that the arguments of learned A.R. are misleading to the extent that-he is only speaking of the definition of shop while the other important factor is that the same should be in self-business used and the term 'business' he said again is to be explained in a restrictive manner.

10. The learned L.A. further said that it the legislature had intended to include workshop there was no bar in adding the specific words into it. He said that shop generally may be a very wide connotation but the same is still one item of establishment which has been explained in West Pakistan Shop and Establishment Ordinance in the following manner:---

" 'Establishment' means a shop, commercial establishment, industrial establishment, private dispensary, maternity home, residential hotel, restaurant, eating house, cafe, cinema, theatre, circus, or other place of public amusement or entertainment, and such other establishments of class thereof as Government may, by notification in the official Gazette, declare to be establishments for the purposes of this Ordinance."

11. While explaining workshop the learned L.A. added that it is an industrial establishment which is distinct from 'shop' hence the same should not be considered as exempt from the wealth tax by application of clause 12(2) of the Wealth Tax Act.

Muddassar Shadi Hall.

12. The appeal in this case is filed by the Department. The exemption has been allowed to Shadi Hall by considering it to be a 'shop' by the first appellate authority which is being challenged by the Department. The reliance of the AAC is upon definition given in the Shop and Establishment Ordinance, 1969 wherein under clause-U of section-2, the same has been explained.

13. The learned L.A. has argued that Shadi Hall is not entitled to exemption' and that the definition of 'shop' in Rent Restriction Ordinance is not applicable in the "Wealth Tax" proceedings. He said that the arguments advanced by him in the earlier case may be applied on this case also. Regarding status of Shadi Hall; the learned L.A. added that it is a place where multifarious activities are being done in a multi-storeyed building. At basement cooking is being done, on ground floor marriages and other parties are organised while at the 1st and 2nd floor the food and tea as the case may be is being served by the assessee himself, or by some other caterer. It comprises multifarious activities and is not covered. in the exemption clause. He further opined that business of marriage Hall admittedly is an activity of commercial nature but the same is distinguishable from a shop.

14. The learned A.R. of the assessee on his turn supported the order of the CIT and said that the assessee's activity is sale of self-cooked food or self-prepared tea etc. It is owned and occupied by him for .the personal business use. He said that shop is not defined in Wealth Tax, however, the 'business is defined under section 2(11) of Income Tax Ordinance, 1979. He was frank enough to admit that the profession has separate meanings. He added that the business and profession are separately defined and lawyers, doctors, engineers architect, chartered accountants are not covered under the definition of business. He further argued that for running a Shadi Hall specialized skill required and the assessee being an expert should not be deprived this basic facility of exemption.

15. He said that from a plain reading of clause 12(2) of the Second Schedule it appears that the exemption is allowable in respect of shop which is for self-business use. While adopting the definitions of 'shop' produced by his predecessor he added that the word 'shop' has been defined in the judgment reported as PLD 1982 Lah. 318. The honourable Mr. Justice Khalil-ur-Rehman. while deciding a case under Pre-emption Act held that a place, the primary object of which is sale of bakery items after preparing same within the same premises is a shop. The relevant part wherefrom is as follows:---

"In the other appeal (R. S. A. No.3211982), the circumstances and the factors on account of which the property was held to be shop have been quoted above. It is apparent that on account of the use to which the building was being put, it cannot be called a factory. The primary or main purpose for which building was being used was sale of the bakery items and this was possible only after preparing these articles of food. The size of the land underneath the building and its situation also support the conclusion that the building was a shop."

16. From the above para. it appears that the premises used for the purpose of sale of items prepared within its limits was considered as shop. The learned Judges while giving findings kept in view basically two factors:---

(a) That bakery is not a factory

(b) That the size of land and building support the claim that it was a shop.

Finding in the above case was given after further observing as follows:---

"The word 'shop' has not been defined by the Pre-emption Act. Oxford Dictionary defines the shop as (1) building, room etc. for retail sale of some commodity or service, (2) institution, establishment, place of business. In Stroud's Judicial Dictionary, some of the definitions noted read as under:---

'The word 'Shop' implies a place where a retail trade is carried out; a blacksmith's shop is rather a warehouse than a shop (R.V. Chapman 7 J P 132). So, of a carpenter's shop, a blacksmith's shop is not a 'shop' within section. 15 of the Shops Act, 1934. Nor is a dry cleaner's premises'. "

17. Further reliance was placed on AIR 1923 Lah. 209 in the case of Santh Singh v. Cobindra. It was observed that the word 'Shop; denotes building primarily used for sale of goods. It was further held that a building used for personal residence, a part of which was used as tailoring shop did not convert it to a shop.

18. Coming to the second limb of his arguments that business and professions are two separate terms, he referred various provisions of Income Tax Ordinance wherein these terms have separately been used.

19. This way the learned A.R. tried to impress us that it is only the business which could come within the definition of the exemption clause introduced by the legislature and the Shadi Hall being a 'place where the cooking is being done and sold to the customers from the some premises qualifies for the exemption. He added that even the recent changes in marriage laws do not change the status. He further added that the judgment of the Karachi Bench also supports his contention, wherein the word shop has been defined.

20. He concluded his arguments by saying that Shadi Hall is a business and not a profession or vocation and the same is owned by the assessee himself for the purposes of his own business hence should be allowed exemption.

21. The learned L.A. who had already given general comments earlier added that the word used is one shop and a Shadi Hall by no stretch of imagination can be called as 'one shop'. It comprises of various shops with further sections in term of a separate cooking department, supply and service department, crockery and furniture section, temporary lights shop, decoration section and so many other connected departments. Keeping in view the fact that a narrow definition is required for an exemption clause, he repeated that departmental stores, multi-storey buildings comprising various sections should not be considered as a 'shop'. Regarding the argument that the business and profession are separate he said that he fully agrees with the same and that the judgment reported as PLD 1988 SC 370 is applicable in support of this view. He further said that a Shadi Hall by all means is a premises where business is being conducted but it is not one business which is being carried on in that. Regarding reference of a bigger shop by learned A.R. he said that it was only one business that was being carried on in one room hence reliance upon the same in respect of Shadi Hall is not justified. The Shadi Hall is a building complex with various compartments and a variety of businesses and the exemption is available to 'one shop' wherein one business is being conducted, the learned L.A. remarked. He added that the judgments referred are distinguishable and not relevant to the facts of the case. He, therefore, re-emphasized that a Shadi Hall is not a shop.

Rashid Ahmad and Aziz Ahmed.

22. These two assessee are involved in the business of manufacturing. The places impugned are workshops. While disallowing exemption to the assessee the. Assessing Officer has only said that workshop is not covered within the definition of shop as it is not a sale out let. Further, as per PT-I form this workshop comprises of an area of one Kanal with a shed over of 5 Marlas. The learned A.R. said that he adopts the arguments given by earlier two colleagues in full and further added that as per Industrial Relations Ordinance, 1969 shop includes every place where some manufacturing process is being done. He said that the shop has not been defined in Industrial Relations Ordinance, 1969, either, but, however, as per section 23-A which provides link between labour and management the manufacturing place is titled as shop. He further said that all the bigger industrial units including the repair workshop of Pakistan Railways are generally called as shop popularly known as Loco Workshop. On this analogy he wants us to admit his contention that every workshop is a shop. The relevant section of the Ordinance speaks as follows:---

23-A. Shop stewards to act as link between Labour and management.---(1) In every establishment in which fifty or more workmen are employed, shop stewards, from amongst the workmen in a shop, section of departments of the establishment shall:

The learned A.R. before concluding said that the assessee owns and also occupies this premises for his business use hence on the facts and circumstances of the case his claim of exemption may be allowed in full. '

23. The learned L.A. said that he has already given his point of view and there is practically no difference in circumstances. The same shall be adopted for deciding this case as well.

Dr. Brig. (Retd) Iftikhar Muhammad, Rawalpindi.

24. The learned A.R. has invoked clause 12(2) by saying that the subordinate officers were not justified in rejecting the claim of exemption of the property owned and occupied by him in performance of his professional requirements specifically when the property is being used for his self business.

25. The learned A.R. started his arguments by disagreeing with the learned counsel Mr. Siraj-ud-Din Khalid that profession is not a business. He said that use of two separate connotations in Income Tax Ordinance i.e. profession and business is only to distinguish for the purposes of rebate as the professional firms., have been allowed certain exemptions from tax which are not available for the business. He brought our attention to the famous case referred as 1919-222 King's Bench Division Christopher Baker & Sons v. Commissioner of Inland Revenue. In this case while deciding an issue of excess profit duty, the learned Bench held as follows:---

The appellants carried on the business of stock brokers, buying and selling stocks -and shares in the market for clients, being remunerated by commission. They. . were also consulted professionally , on thepromotion ofand the alterations and, adjustments or capital in commercial undertakings, and they also' made valuation of stocks and shares forming part of the estates of deceased persons, being remunerated for such advice and valuations by fee:--

Held, that stockbrokers, in buying stocks and shares do not carry on a profession within the meaning of section 39 of the Finance (No.2) Act; 1915, and that the. work of advice and valuation for which the appellants were remunerated by fees was done as part of land in connection with their business as stockbrokers and not in the exercise of a profession, and that, therefore, the appellants were liable to excess profits duty. "

26. Further reliance is placed on another para of the same judgment which is as follows:---

"All professions are business, but all business are not professions, and it is only some businesses which are taken out of the operation of the section namely, those which are professions, the profits of which are dependent mainly upon personal qualifications and in which no capital expenditure is required or only capital expenditure of a comparatively small amount. As I understand it that does not mean that every business where the profits depend on personal qualifications and not on capital, is therefore, a profession within the meaning of para.(c) and accordingly not liable to this duty,. I gather this para. (c) requires two elements to be satisfied; the business must be a profession and it must also be a profession of which the profits are mainly dependent on the personal qualifications of the person carrying it on and in which no capital expenditure is required or only capital expenditure of a comparatively small amount. No doubt the relation of personal qualifications to capital helps one to see whether or not the business which is being carried on is in any sense a profession, but the section does not say 'any business the profits of which are dependent mainly' and so on; it says 'any profession'. etc. It may be that the profits of some business depend upon the personal qualifications of the persons carrying them on rather than upon other matters. That is my construction of the section according to the decision of the Court of Appeal in Burt's case. (1) At any rate it is the construction which I think the section bears. One has to ask whether the advising and valuing part of the appellants' business was the carrying on of a profession. It is true that so far as it is purely advisory it does not depend upon the personal qualification of the appellants, and does not depend so much upon capital, but one has to see whether the Commissioners have gone wrong in law. It is probable that the appellants, being stockbrokers, attracted a certain amount of advising and valuing business for which -they charged a fee. As regards the valuations this fee may have been merely a liquidated commission though not a percentage commission; the fee charged by the appellants for advising may have been a lump sum fee. But that work was probably all attracted by and ancillary to their business of

stockbrokers."

27. From the above paras it appears that the Honorable Judges have distinguished the profession from business. It has been observed that all professions are business but all businesses are not profession.

The key to determine whether business is a profession or not, to that in the case of profession the profit earning depends upon the personal qualifications and specialization of a person/persons attached to such profession but, however, still all the business conducted by persons having special qualification cannot be called as professions. The example is that if an engineer or architect earns his livelihood through providing services as an engineer or architect; he is a professional but if by virtue of his specialization and knowledge of skills he starts the business as a contractor his receipts shall become business receipts. Coming back to the impugned case the learned A.R. said that if the assessee remains consultant and he only gives advise after checking the patients and writes down some prescription, he is a professional. However, if he starts giving medicines from his own clinic, opens a Lab. within his own premises, installs various other units like X- Ray, MRI, E.C.C., Ultra Sound and other hospital equipments; he becomes a businessman and this way is entitled to the exemption. He conceded to the extent that consultancy services are not business in the strict sense, however, he added. that other services being in the nature of an industry where services against payment of fee are provided are business and the premises is a 'shop'. The judgment relied upon in favour of his claim is (1969) 74 ITR 94. This judgment was given by the Madras High Court in the case of Dr. P. Vadamalayan v. Commissioner of Income Tax, Madras. It was held that carrying on of the nursing home by the assessee as part of his profession wax of a commercial nature and combined activities of the assessee constituted business of the assessee, thus, was entitled to development rebate., The decision is supported by following finding:---

"But in these days of advanced science and ebullient developments commensurate with the need of the community, society and country, a centrifuged activity, though related to a profession as such, may not in a given case be interpreted as a wooden exercise thereof, if other compelling and surrounding circumstances need an expensive understanding of it in a commercial way. An expert professionalist, if he has the inclination, capacity and zeal to expand his activities may do so. As a result thereof he might enter into the arena of business activity. Such a composite activity is conceivable and indeed is plausible in modern days. No doubt, no decisive test can be laid down but the multitude of incidents holding the same might reflect on the true nature of the vocation. If, therefore, an expert equips himself, as in this case, with plant and machinery with which he, with the aid of this professional skill and in collaboration with qualified assistants, is able to turn out an activity which is not strictly a professional activity but favours of a commercial activity as well, is it to be understood still that he is mechanically exercising his profession, we think not. Any kind of commercial activity telescoped to professional activity ought to be understood as a business, is properly understood. In such circumstances it may be that the business aspect of the activity springs from the professional activity of the person concerned and is irretrievably connected with it. Nevertheless, if it is said that if there is an organic and composite activity and if there is a merger of professional skill with trading or business, the poser to be answered is whether the combined endeavour results in emoluments which, though not strictly term able as profits are really gains in the shape of profits. If the answer is in the affirmative, it is a business as it is the outcome of combined efforts. As Chagla, C.J. said in Commissioner of Income Tax v. Sir Homi Mehta's Executors."

He further supported his claim through another judgment reported as (1981) 128 ITR.727 in Commissioner of Income Tax, Tamil Nadu-IV v. Dr. V.K. Ramachandran. It was held that even a professional activity could be tinged with a commercial character if the indicia of commerce is manifestation it. The way in which the assessee carried on the X-Ray activity was in no way different from a non-qualified person carrying on, a radiological institute. The mere fact that a professional mind had, as an adjunct to his professional activities, such an institute did not disable him from running it as a commercial venture and earning income therefrom. The Tribunal was right in its view and the assessee was entitled to development rebate.

The learned A.R. moving forward presented before us another judgment of Indian Supreme Court reported as (1981) 129 ITR 295. He added that the judgment which he has now, referred is by the Supreme Court of India and the Hon'ble Supreme Court has held in unequivocal terms that the professional connection between the appellants and a solicitor- was a "business connection" within the meaning of section 9(1).

Learned L.A. reiterated that profession firstly is not business. Secondly, if at all it is to be considered as a business, clinics, hospitals and labs cannot be considered as shops. He re-emphasised that every business premises cannot be held to be a shop, be it occupied by a professional or otherwise. Shop herein has a very narrow definition being in respect of an exemption clause. He, therefore, said that the exemption is only available to a businessman doing purchase and sale in the four walls. He further added that doctor impugned is a Specialist who-is admittedly checking Indoor and outdoor patients. The machinery, he said installed and used is in aid to determine the actual decease. He can run his professional activities without the help of these business activities and this does not establish that the clinic is a 'shop'. He further added that depreciation allowance allowed to said doctor; only explains the extent of machinery but the same being connected with the treatment of his patients could not make his premises a shop covered under the exemption clause. It can at best be called a clinic equipped with clinical laboratory and the combination can be called as hospital.

Dr. Muhammad Afzal.

31. The learned A.R. firstly said that he adopts all the arguments of learned Mr. Habib Fakhar-ud-Din. He said' that assessee having same circumstances as in the case of Dr. Brig. (Retd.) Iftikhar Ahmad, the exemption should be allowed to his assessee also. He, however, in addition to the judgment presented in the above case filed another which is reported as (1975) 32 Tax 273 (High Court). The relevant para. wherefrom is as follows:---

"But in our considered opinion it is not always safe to borrow the meanings attached to terms and phrases used in one statute as aid in support of the interpretation of a different statute meant for a different purpose and dealing With a wholly different subject-matter. It is of course permissible to have recourse to the ordinary dictionary meanings in interpreting. a statute. But in the instant case even the dictionary meanings of the term, which has been interpreted differently, is not conclusive and helpful in resolving the difficulty.

32. Learned L.A. also repeated his arguments and said that in fact above noted judgment supports his point of view that nothing should be imported from some other statute. He said it further supports his claim that the ordinary dictionary meanings even in the impugned case are not conclusive or helpful in resolving the difficulty. He, therefore, called the action of set aside by the CIT(A) to be unjust.

Mr. Muhammad Yousaf Engineering Works. Islamabad W.T.As. Nos.248 and 249/LB of 1998-99

33. Mr. Aslam Anwer, Advocate said that he adopts the arguments of Dr. Ilyas Zafar, advanced by him in the case of Mrs. Shamim Asghar. He said that the definition of shop as given by various dictionaries may be adopted for considering his workshop to be a shop. He further added that the definition of business has been given in section 2(11) of the Income Tax Ordinance and the same includes any trade, commerce, manufacturer or any adventure or concern for the nature of trading of manufacture.

Mr. Pervaiz Afzal, Lahore, W.T:A. No.624/LB of 1999.

34. The learned A.R. of the assessee adopted the earlier arguments. He argued that the workshop is a part of shop and the assessee being a manufacturer of PVC pipe is fully covered under the definition already discussed.

Dr. Khalid Saeed Khan, Attock W.T.A. No.585/LB of 1998-99.

35. The assessee is running a hospital which he claims to. be fully covered under the definition of 'shop' and calls the same at par with other business or professional premises like hair cutting saloon, 'laundry and clinic etc. He refers 1988 (57) Tax 3 Trib. He said that the learned AAC, therefore, has rightly allowed exemption of hospital in this case., The learned L.A.'s arguments that the business covers trade, local purchase and sale only, he said is not a correct interpretation for the purposes of defining shop. In his opinion the business has got very wide connotation and the hospital is fully covered in the definition of 'shop'. He further said that he adopts all the arguments earlier advanced by other learned colleagues.

Hair Muhammad Arif, Faisalabad W.T.A. No. 1281/LB of 1998

36. The learned A.R. while adopting all the earlier arguments added that his premises besides being a manufacturing unit is sale spot as well hence, is covered under the definition of shop for all intents and purposes.

37. Before-we give our finding it will- be appropriate to recap the arguments given by learned counsel before us.

38. The emphasis of all the friends at Bar remained that the word 'shop'. as used in exemption clause 12(2) of the Wealth Tax Act should be given wider -meanings and every definition of all the Dictionaries should be adopted for allowing the exemption. It is also argued that the word 'business' used in Ordinance includes all kinds of professions and vocations and every activity which is done to earn money other than salary is business.

39. Further, they want us to include in the definition of shop every kind of service rendering organization, repairing workshops, consulting doctors. hospitals, dispensaries, clinics, Chambers of Lawyers, C.A's. Office, engineers, a tailoring shop, a manufacturing concern which also conduct sales of its commodities within same premises, auto workshop, a barbar premises, laundry, hotel, black-smith, architects, planners, marriage halls, departmental stores, etc.

40. Conversely the learned L.A. wants us to take restrictive view and says that the same only includes a place where business of local purchase and sale is being conducted within the four walls.

41. Both have given very lengthy arguments, the summary of which has already been mentioned by us above. The principle of deciding such issues have also been argued at length. Bar's point of view is that the interpretation should be enlarged in keeping view the famous principle of interpretation that where two constructions are possible one favourable to the assessee be adopted, while learned L.A. claims that the above view is not applicable in the case of an exemption clause. In his opinion a restrictive view should be adopted.

42. Firstly we would like to dilate upon this aspect of the case. Admittedly the fiscal statutes need strict interpretation and in this regard the famous verse from the well-referred case by Mr. Justice Rowlett may be mentioned. This verse has already been repeated in a number of judgments but, however, being relevant to the facts of the present case its mentioning would not be unnecessary. The same has been reproduced in the following manner:---

"PLD 1988 Supreme Court 370

Statutes which impose pecuniary burdens are subject to the same rule of strict construction. All charges upon the subject must be imposed by clear and unambiguous language, because in some degree they operate as penalties; the subject is not to be taxed unless the language of the statute clearly imposes the obligation and language must not be strained in order to tax a transaction which had the legislature thought of it, would have been covered by appropriate words. One has to look merely at what in clearly said. There is no room for any intentment. There is no equity about a tax. There is no presumption as to a tax. Nothing is to be read in, nothing is to be implied. One can only look fairly at the language used. But this strictness of interpretation may not always ensure to the subject's benefit, for if the person sought to be taxed comes within the letter of the law he must be taxed, however, great the hardship may appear to the judicial mind to be".

Since there is no controversy to this extent, we move to the other issues.

The exemption clause firstly requires a strict interpretation and secondly a restrictive view. Unlike a charging provision where the onus lies on the Department for their assessment in the case of exemption it is the assessee who is to prove that his case is covered within the letters of law. The view of the higher forums within and outside Pakistan now is that in the case of exemption clause the benefit is to be given to the Department and not to the assessee. This Js where we would like to refer the judgment given by a Division Bench of ITAT in the case of Chamber of Commerce and Industries wherein following finding was given:---

"The arguments- of the learned A.R. that the doubt in the case of fiscal laws should be resolved in favour of the subject is also of no help to the assessee in the present case. The provision impugned is an exemption clause. General principle of interpretation undoubtedly is the same as is argued by Mr. Shiraj Khalid, but in the case of an exemption provision there is exception. Mr. J. Malik Muhammad Qayyum, in W.P. No. 13113 of 1996 have rightly held

'It is now well-settled that provisions granting exemption must be strictly construed and doubt, if any, must be resolved in favour of the revenue.'

The reason for requiring a strict construction of statutes in favour of the State where a person claims immunity from the common burden of taxation, has been ably stated by Mr. Justice Brewer, as appears from the quotation from his opinion, in Stahl v. The Education Association of the Methodist Church (54 Kan. 542, 38 Pac, 796):

All property receives protection from the State. Every man is secured in the enjoyments.. of his own no matter to what use he devotes it. This security and protection carry with them the corresponding obligation to support. It is an obligation which rests equally upon all. It may require military service in time of war, or civil service in time of peace. It always requires pecuniary support. This is taxation. The obligation to pay taxes is co-extensive with the protection received. An exemption from taxation is a release from this obligation. It is the receiving of protection without contributing to the support of the authority which protects. It is an exception to a rule, and is justified and upheld upon the theory of peculiar benefits received by the State from the property exempted. Nevertheless, it is an exception; and they who claim under and exception must show themselves within its terms.

43. Moreover, exemption laws are in derogation of equal rights, and this is an equally important reason for constructing them strictly. And a third reason appears from the Courts language in Bank of Commerce v. Teppessee (161 S.C. 134, 145 S.Ct.456, 40 L. Ed. 645):

"Taxes being the sole means by which- sovereignties can maintain their existences, any claim on the part of anyone to be exempt from the full payment of his share of taxes on any portion of his property must on that account be clearly defined and founded on plain language. There must be no- doubt or ambiguity used upon which the claim to the exception is founded. It has been said that a well founded doubt is fatal to the claim; no applications will be indulged in for the purpose of construing the language used as giving the claim for exemption, where such claim is not founded upon the plain and clearly expressed intention of the taxing power."

44. We, therefore, without any scintilla of doubt say that the exemption given by a statutes cannot be stretched so as to enlarge its scope but it requires strict application against the person who claims exemption. In other words before it can be recognised, the person or property claimed to be exempt must come clearly within the language apparently granting the exemption.

45. Now we come to the other relevant principle of interpretation. Since we have to define two words we must know how they are to be interpreted. This is where we wish. to refer para. 189 from the Construction of Statutes by Earl T. Crawford 1940 which reads:---

" 189. General and Special Words or Terms.--It is a basic rule of construction that general words should be given a general construction; that is, they would be given their full and natural meaning, unless the statute in some manner reveals that the legislative intent was otherwise. Such a contrary intent may be found in the purpose and subject-matter, or context of the statute, so that as a result the general terms may be qualified of restrained.

Here reverting back to the judgment referred by learned A.R. reported as (1975) 32 Tax 237 (H.C.) would be relevant. It said, "But in our considered opinion it is not always safe to borrow the meanings used in one statue".

In this regard more relevant para. is as follows:---

"No doubt the elementary rule of construction is that the words used in a statute should be construed literally but according to what is termed as the 'Golden Rule of Interpretation' by Maxwell, the ordinary meaning of a word need not be adhered to if a construction based on it, would be at variance with the intention of the Legislature as collected from the statute itself or if it leads to an absurdity. In such cases the language may be varied or modified so as to avoid such absurdity or inconvenience Beck v. Smith (1836) 2 MW (191). While interpreting the statutes like the one before us, the proper mode of interpretation or discovering the true intention of the Legislature would be to consider as to what was the state of law before the statute or its provision was given its present form and as to what was the mischief or difficulty which was sought to be suppressed and remedy which the Legislature had intended to advance. Ref: Abdul Majid Khan v. Chief Settlement and Rehabilitation Commissioner (PLD 1968 SC 154); Divisional Superintendent, P.W.R. v. Bashir Ahmad (PLD 1973 SC 589); and Rab Nawaz v. Jahana (PLD 1974 SC 210) and Maxwell on the Interpretation of Statutes 12th.Edn. at P.40."

46. This is where locating the history of this legislation will be relevant: There was a general demand from the traders of various markets that the exemption limit of Rs.10,00,000 or of one residential house is not enough-as the demand of wealth tax by adding value of shops becomes very high. ,The then political Government accepted the demand and directed for exemption of one shop in addition to the residential house. This demand was from various trade organizations and it was accepted only as a benefit to the small shopkeepers. The word one shop, therefore, used .as such is also .not without purpose.

47. Coming back to the issue again the relevant provision is as follows:---

Clause 12(2) "One shop owned and occupied by the assessee for the purpose of his own business."

The requirements for exemption under above clause are:---

(a) It is for one shop

(b) The shop must be owned and occupied by the assessee himself; and

(c) The purpose should be conducting own business therein;

48. There is no controversy regarding the requirement of ownership and occupation. Regarding the words 'shop' and 'Business' we have mentioned in detail various definitions as given by learned friends. However, for the purpose of arriving at a conclusion we shall discuss some of them. The well referred judgments in this regard wherein shop has been defined firstly is in Shops and Establishment Ordinance, 1979. The same speaks as follows:--

"2(u) 'Shop' means any premises used wholly or in part for the wholesale or retail sale of commodities or articles for cash or on credit, or where services are rendered to customers, and includes are office, a store room, godown, warehouse, or place of work, whether in the same premises or otherwise, mainly used in connection with such trade or business."

49. It has been so decided in, the well-quoted judgment reported as 1992 SCMR 2351. In this judgment the interpretation has been given in the following manner:---

1992 SCMR 2351 "A perusal of the above quoted definitions indicates that the ordinary dictionary meaning of a 'shop' is a place where the things are kept for sale usually in small quantities to the actual consumers or building, room for retail sale of some commodity or service. In broad sense, it also includes the place in which the manufacturing or repairing is done."

The second judgment speaks as follows:---

1999 PTD (Trib) 2283.

11. "Thus, we find that the word 'shop' means a building where goods or services are sold on retail basis i.e. directly sold to the consumers and it is even literally employed to describe in a school, manual training course, schoolroom equipped for teaching skills for use in a workshop, study as a classroom discipline and a class or department. It, therefore, follows that a building owned and used by a person for running a school, to offer instructional services to the seekers of knowledge and skills against monetary consideration, qualifies for exemption from tax under clause 12(2) of the Second Schedule (ibid), as a shop owned and occupied by the appellant for the purposes of his own business. "

The above definitions give both the views, the restrictive and the broader. In its restrictive view it says that it is a place where the things are kept for sale usually in small quantity or services. The latest judgment which is being used in support by the assessee as above taken a broader view. It has included even a school within the definition of word 'shop'

With full respect to their finding while going for this definition the learned friends have ignored that the exemption clause was not to be given broader meanings. We are not dealing with school at the moment, however, since this case has been referred before us in support for the purposes of definition of the word 'shop' one at best could include a classroom, discipline and a class or department within the 4 walls of one room but not various rooms and classrooms or classes. A school ordinarily is not within 4 walls and normally it does not comprise one room only. It includes various watts and comprises more than one room meant for study of various classes and disciplines etc. We, therefore, do not find ourselves in agreement with this broader view.

This is where we dare mention with full respect that the finding is not harmonious. It says, "It is even literally employed to describe in a school a manual training course, school room equipped for teaching skills for use in a work, study as a class room discipline and a class or department". (Underlined for emphasis by us). The other part which in our humble opinion is not in harmony not to above lines speaks as follows:--- .

"It therefore, follows that a building owned and used by a person for running a school, to offer instructional services to the seekers of knowledge and skills against monetary consideration, qualifies for exemption own business."

In first part above the emphasis is on a manual training course or on a school room but subsequently it has been held that the whole school complex is 'one shop'. In our humble opinion this being a facility provided restrictively only the first part of the findings was nearer.

The Supreme Court judgment defining the word "Shop" when speaks of ordinary dictionary meanings says that 'shop' is a place where the things are kept for sale, usually in small quantities, to the actual consumers or building room for retail sale of some commodity or service. So, it is place where only a small scale activity of sale and services is performed meaning thereby it includes small traders, tailoring shops, barbar saloons and any other such place where commodities are sold and where such services are being rendered. This, however, being with reference to some other statute; is not safe, hence also ignored.

Coming to some other dictionary meanings the same are reproduced as follows:---

Law Dictionary of Words and Phrases (By Dr. A.R. Biswas) Judicially Defined Page No.604.

Shop: "Shop means any premises where goods are sold either wholesale or by retail or both wholesale and by retail and includes a laundry, a hair-cutting saloon and other places where services are rendered to customers. The protection of Civil Rights Act, 1955 section 2(e)."

The Concise Oxford Dictionary 9th Edition

(At page 1281) Shop.---1. A building, room, etc. for the retail sale of goods or services (Chemist's shop; betting shop) 2. colloq an act of going shopping (our big weekly shop), 3. a place in which manufacture or repairing is done; a workshop (engineering shop) 4 a profession, trade, business, etc., esp. as a subject of conversation (talk shop) 5. colloq. an institution, establishment, place of business etc.

Webster's New Dictionary (Second College Edition at page 1316)

Shop: 1. (a) a place where -certain goods of service are offered for sale; esp. a small store (b) a specialised department in a large store/the gourmet shop/ 2. a place where a particular kind of work is done/ 2 a printing shop/ 3. In some schools, a manual-training course, class, or department."

52. The first definition is in respect of the protection of Civil Rights Act, 1955, Section 2(e), we cannot adopt the same keeping in view the famous principle that for interpretation of a word in one statute, help from other statutes is not safe. The second definition which is from Concise Oxford Dictionary 9th Edition, since interpretation from dictionary is more secure and we have in our minds that a restrictive view is to be taken, we consider a part of it to be relevant which is that a shop is a building, room, which is for the retail sale of goods. In tire Webster's New One Dictionary, it is said that, it is a place where certain goods or services are offered for sale especially, a small store, other definition given says, "a specialised department in a large store", the third definition in Webster Dictionary says that in some schools "a manual training course, class or department.

From all the above definitions one thing is common that a place that comprises for various rooms or various -sections are not to be considered as a 'shop'. The common factor in the definition, however, is that the shop is a place where certain goods are offered for sale and this is perhaps the only apt definition which can be taken for the purpose of solving the controversy. Our view is fortified from the Webster's New Dictionary meaning reproduced above which we repeat again "a specialised department in a large store" and in some class, class or department and stores, in large departments or a building comprising various rooms. (underlining is ours)

53. Coming to the definition of word "business" it has also not been defined in Wealth Tax but the Income Tax Act has defined the same vide -Lion 2(11). It says"---

(11) "business includes any; trade, commerce or arty adventure or concern in the nature of trade, commerce or manufacture:'

The definition again is very wide and it says 'that it includes the items mentioned therein which means other items can also be included in it. Though we are firm in our view that here again the restrictive view of business' is to be taken, however, the judgment referred in respect thereto also being in respect of allowance of rebates for business activities, professionals can be included in the definition thereof. We may restrict our view as is required for interpretation of the exception clause but in view of the, discussion earlier we are unable to hold that the professional activities are not covered under business activities., Any kind of commercial activity telescoped to professional ought to be understood as a business in our opinion is properly, understood. It is irretrievable that a person connected with professional activity reap fruits for the business aspect of an organization and it being a composite activity because of merger of profession and the business as such, the emoluments which are earned against such combined effort are gains of an activity of profession as well as of a business. In modern age there shall hardly be any doctor who is not having medical instruments besides consultancy. The general physicians normally have a stethoscope, blood pressure checking instrument, office furniture, a little stock of medicines to give the patient few doses of medicine and his charges include consultancy and cost of the medicine. Besides, a doctor may keep additional instruments to diagnose the actual disease as in the case of the doctors before us who are having most modern machinery of which they are claiming depreciation in lacs of rupees. We, therefore, need not further discuss the same and hold the above professionals works to be the business activities being inter-connected.

54. We have already mentioned in the above para. that words and terms are trot to be given general construction and they should be given their full and natural meanings. In this regard the judgment given by Lahore Bench to us gives a correct interpretation of the word 'shop'. It is not a very exhaustive judgment but, however, the same has dealt with the issue of clinic. The reliance of the bench was on Shop and Establishment Ordinance, 1969 and few dictionary meanings. The dictionary. meanings adopted are from Concise Oxford Dictionary Page 1121. New Webster's Dictionary page 174 and the Compact Edition of The Oxford English Dictionary. The learned Tribunal found that the shop was only a part of Establishment and was defined as follows:---

" 'Shop' means any premises used wholly or in part for the whole sale or retail sale of commodities or articles, either for cash or on credit, or where services are rendered to customers, and includes an office, a store room godown, warehouse or place of work. 'It was observed that the private dispensary was altogether a separate entity from shop, the mentioning of two separate words for shop and private dispensary in the definition of establishment was relied upon. It was also observed that a maternity home, industrial home cum-shop, cafe, cinema were not shops, being separately defined in the shop and Industrial Ordinance."

55. In our above discussion eve have considered that reliance upon other enactments for the purpose of definition is not safe hence our finding is not on the basis of the same. We only consider that above definition or establishment is more near to the rules settled by us in respect of interpreting the words used in an exemption of clause. We, therefore, without having any doubt in our mind consider a 'shop' to be part of establishment and an establishment includes in clinic, a hospital, a marriage hall, a manufacturing shop, a factory where a mechanic persues his trade, but none of them is covered by the word 'shop' as used in Wealth Tax Act, 1963.

56. Before we part it is very relevant to see as to which is a shop in common parlance. In our society when a person says that he is going to his shop, he never means that he is going to school, clinic, marriage hall, hospital, workshop etc. This argument can be seen from another angle. When an ordinary person goes for shopping he does not go to a clinic a hospital or marriage hall, a cinema hall or a motor workshop or a factory. He goes to school for study, to a clinic and hospital for treatment to cinema for watching some movie, to a marriage hall for attending same party and to a motor workshop for repair of his vehicle.

Further, clinics and hospitals before us again do not come within the purview of 'one shop'. The clinics normally have, a doctor's office, laboratory and certain other rooms for use of plant and machinery. With this variety of activities and various shops, one should not claim himself to be 'one shop'. The same applies on marriage halls and departmental stores as well. The arguments mentioned by us in each case separately from the Revenue side are in fact very convincing and we fully endorse them.

57. Keeping in view above detailed discussion and also having in mind that laws derive their significance and meanings from the context, the purposes and circumstances which necessitated them and became the reason of their origin, also being conscious that the duty of the Courts while interpreting laws, is to suppress subtle inventions and evasions for the continuance of the mischief, we consider merit in Department's case. (Above principle was laid in Heyden's case (1584) 3. Co. Rep. 70 and has been followed by Lord Denning in Seaford Court Estates Ltd v. Asher (1949) 2 KB 481) and more recently in Pakistan by the Supreme Court in judgment reported as PLD 1968 SC 154

58. We, therefore, without any hesitation hold that the 'word 'shop' means a place where goods or merchandise are kept for sale to consumers usually in small quantities on retail and/or wholesale basis. The examples of the same are, a trader's shop selling any kind of utility items a printing shop, a place where goods are prepared and sold for human consumption i.e. bakery and sweetmeat shop, a specialised department in a large store, a Gourmet shop, chemists shop. There is, however, exception in this rule. The word used in clause 12(2) in 'one shop', hence if any of the above activity is done by the, assessee in two or more shops, he shall be entitled to the exemption of one only. This obviously concludes that, a motor mechanic workshop, a factory, a departmental store, a doctor's clinic, a hospital, a marriage hall, a cinema hall, a school or such other educational institutions F are not a 'Shop' within the meanings of clause 12(2) of the Second Schedule of the Wealth Tax Ordinance.

The exemption claimed in respect of the assets not discussed in the above judgments shall be decided by the concerned authorities on the merits of the each case in the line of the ratio decided by us above.

All the appeals before us are, therefore, decided in favour of the Department. The appeals on the other issues, if any, shall be decided by the respective Division Benches as per their own convenience.

C.M.A./M.A.K./18/Tax(Trib.) Order accordingly.