(a) Income‑tax‑‑‑

‑‑‑‑Lease business‑‑‑Aspect of the transaction that "sale of certain assets subject to an agreement to repurchase the same at some future date and difference between price of sales and repurchase is the profit earned by the financer and Repo transaction is in the nature of `pawn' transaction", was not considered at the assessment stage‑‑‑Appellate Tribunal maintained the setting aside order of the First Appellate Authority.  

(b) Income Tax Appellate Tribunal Rules, 1981‑‑‑

‑‑-‑R. 10‑‑‑Contents of memorandum of appeal‑‑‑Appeal was dismissed by the Appellate Tribunal on the ground that grounds vague and against the rules of Tribunal.

(c) Income‑tax‑‑‑

‑‑‑‑Profit and loss expenses‑‑‑Disallowance‑‑‑Department failed to point out the basis of fixation of disallowance at 20% by Assessing Officer which had been reduced to 15 % by the Fits t Appellate Authority‑‑‑Order of First Appellate Authority was maintained by the Appellate Tribunal.

(d) Income Tax Ordinance (XXXI of 1979)‑‑‑

‑‑‑‑S. 17‑‑‑Interest on securities‑‑‑International Accounting Standard No. IAS‑18 ‑‑‑Federal Investment Bonds‑‑‑First Appellate Authority directed that interest income on Federal Investment Bonds to be taxed on accrual basis‑‑‑Assessee contended that only interest receivable was to be taxed and there was no mention of any accrued interest in S.17 of the Income Tax Ordinance, 1979‑‑‑Validity‑‑‑Although, S.17 of the Income, Tax Ordinance, 1979 provided chargeability of tax on interest income `receivable', the same did not provide for any deduction to be allowed against such income‑‑‑If interest income on Federal Investment Bonds or other investment securities was to be taxed under S. 17 of the Income Tax Ordinance, 1979 in isolation, the assessee would not be able to claim any expenditure against that except what was provided in S.18 of the Income Tax Ordinance, 1979‑‑‑Provisions of S.18 of the Income Tax Ordinance, 1979 revealed that assessee was only to be allowed actual interest 'paid' on moneys borrowed for invest ment in such bonds which meant that the assessee would not he entitled to deductions even in respect of the interest expense which was due for payment but not paid by the assessee‑‑‑Order of First Appellate Autho rity was maintained by the Appellate Tribunal.

1994 PTD 1051 ref.

(e) Income-tax---

‑‑‑‑Determination of income‑‑‑Matching costs‑‑‑Matching costs should be considered before income is determined.

(f) Income Tax Ordinance (XXXI of 1979)---

‑‑‑‑S. 84‑‑‑Liability in certain transactions in securities‑‑‑Provision of S.84 of the Income Tax Ordinance, 1979 is a deeming provision, and such provision cannot be applied generally.

(g) Income Tax Ordinance (XXXI of 1979) ‑‑‑

‑‑‑‑S. 80‑D(2), Expln.‑‑‑Minimum tax on income of certain persons‑‑ "Turnover"‑‑‑Definition‑‑‑Explanation to subsection (2) of S.80‑D of the Income Tax Ordinance, 1979 did not contain an absolute and exhaustive definition of the term `turnover' as this was an Explanation which had been introduced to remove the doubt and, prima facie, such doubts were there with regard to the treatment of trade discounts shown on the invoices or bills.

(h) Income Tax Ordinance (XXXI of 1979)‑‑‑

‑‑‑‑S. 80‑D‑‑‑Minimum tax on income of certain persons‑‑‑Intention of Legislature‑‑‑Provision of S.80‑D of the Income Tax Ordinance, 1979 shows the intention of the Legislature to levy a minimum tax on a company irrespective of the fact whether it has earned any profit or not.

(i) Income Tax Ordinance (XXXI of 1979)‑‑‑

‑‑‑‑S.80‑D‑‑‑Minimum tax on income of certain persons‑‑‑"Turnover"‑‑ Connotation‑‑‑Term `turnover' is a wide term and it includes the receipts and accruals from the major business trading/professional activity of the company and since the law says that the turnover from all sources must be taxed, it has to be from all sources and all activities of business of the assessee‑‑‑Such activities which are not in the ordinary course of the business of the assessee, such as the sale of fixed assets, would not form a part of the "turnover".

Principles of Income‑tax Law with International Tax Glossary by Huzaima Bukhari and Dr. Ikramul Haq ref.

(i) Income Tax Ordinance (XXXI of 1979)‑‑‑

‑‑‑‑S. 80‑D‑‑‑Minimum tax, on income of certain persons‑‑‑Leasing business ‑‑‑Chargeability of minimum tax under S.80‑ D of the Income Tax Ordinance, 1979 on an assessee deriving income from leasing business ‑‑‑Validity‑‑‑Assessee was engaged in the business of providing financial facilities to its customers and certainly this was a benefit to its customers by way of receiving loans and credits and other financing facilities ‑‑‑Assessee could not be excluded from the purview of the provisions of S.80-D of the Income Tax Ordinance, 1979.

Principles of Income‑tax Law with International Tax Glossary by Huzaima Bukhari and Dr. Ikramul Haq ref.

Naushad Ali Khan, D.R. for. Appellant (in I.T.As. Nos.847/IB, 848/IB of 2000‑2001 and 249/IB of 2003).

Kashif Aziz Jehangiri, ACA for Respondent (in I.T.As.. Nos.847/IB, 848/IB of 2000‑2001 and 249/IB of 2003).

Kashif Aziz Jehangiri, ACA for Appellant (in I.T.As. Nos.824/IB, 825/IB of 2000‑2001 and 277/IB of 2003).

Naushad Ali Khan, D.R. for Respondent (in I.T.As. Nos.824/IB; 825/IB of 2000‑2001 and 277/IB of 2003).

Date of hearing: 3rd September, 2003.

ORDER

By this consolidated order we proceed to decide six cross -appeals in the case of a public company deriving income from leasing business. The cross‑appeals for the assessment years 1997‑98 and 1998‑99 arise out of the order, dated 26‑1‑2001 recorded by the learned CIT (Appeals). Zone‑I, Islamabad whereas the cross‑appeals for the assessment years 1999‑2000 arise out of the order, dated 15‑3‑2003 of the same First Appellate Authority.

2. The relevant facts in brief are that the assessee derives income from leasing business and other allied activities. In the assessment year 1997‑98 the assessee filed a return to declare a net loss of Rs.820,184,651, with the following computation as appearing in the assessment order:‑‑

3. After examination of the books of accounts and detailed proceedings the Assessing Officer discarded declared version and assessed the .total income of the assessee at Rs.560,808,195 out of which Rs.497,686,474 was attributed to lease business and depreciation was allowed so as to arrive at nil income from such activity. Income from other receipts was assessed at Rs. 63,121,720 and subjected to tax under the normal law. It may be useful to reproduce the manner in which income of the assessee was assessed by the Assessing Officer:

Add backs out of Finance & Bank charges

Income from lease rental.

Other receipts

Other income

4. In the assessment year 1998‑99 the assessee filed a return to declare net loss of Rs.712,461,588 computed by assessee in the following manner as produced in the relevant assessment order:‑‑

5. The assessing Officer assessed the total income of the assessee of which Rs.911,800,916 was attributed to lease rentals and against such attributed income, tax depreciation on leasing assets was allowed at Rs.803,740,549, leaving a balance of income from lease rental at Rs.108,060,367. Income attributable to other receipts was assessed at Rs.86,355,286. Thus total net income from all sources was assessed at Rs.194,415,653 and tax was charged thereon under the normal law.

6. The learned CIT(A), vide impugned order, dated 26‑1‑2001 pertaining to the assessment years 1997‑98 and 1998‑99, held that the Assessing Officer had incorrectly restricted the depreciation allowance to the extent of net income from lease rentals before depreciation on leased assets and he directed the Assessing Officer to allow depreciation on leased assets against the gross income from lease rental first and then charge/apportion other expenses between lease and other income. The Assessing Officer was also directed to include the lease‑related income such as front‑end fee etc., in the income from lease rentals as already held by the Tribunal in a number of cases. Also Assessing Officer was directed to set off the loss under, any head in accordance with the provisions of section 34 of the Tax Ordinance, 1979 (hereinafter called the Ordinance, 1979). The assessee's appeal on the grievance of non-allowance of depreciation brought forward from earlier years was also accepted as the departmental appeals had already been decided by the Tribunal in favour of the assessee. The expenditure incurred by the assessee on lease‑hold improvement was allowed by the learned CIT(A) is revenue expenditure and so was the expenditure in respect of arrangement fee allowed. An exchange risk fee incurred by the assessee was allowed as revenue expenditure. On the issue of Federal Investment Bonds (FIBs), the learned CIT(A) decided to split issues under two heads. The issue of premium paid on FIBS was set aside for de novo consideration whereas the issue of chargeability of tax on interest income on FIBS i.e., to be taxed on accrual basis or receipt basis, was decided in favour of revenue in view of an other decision of the Tribunal recorded in ITA No. 31/113/1996‑97, dated 21‑6‑2000 in the case of Askari Commercial Bank.

7. In the assessment years 1999‑2000 the assessee filed a return to declare a loss of Rs.498,208,707 whereas the assessment was made at total income of Rs.989,479,969 which was partly attributed to the lease rental loss of Rs.290,441,216 and income attributable to other receipt at Rs.87,743,724 and after set off of brought forward losses, loss was assessed. The Assessing Officer however levied minimum tax under section 80‑D of the 1979 Ordinance adopting the total turnover at Rs.1,859,631,676. The learned CIT(A) vide the impugned order, dated 15‑3‑2003 set aside the assessments in a summary manner with the direction that the assessee should proceed afresh keeping in view the earlier orders of the Tribunal as well as the First Appellate Authority and provisions of law. On the issue of the minimum tax, the Assessing Officer was required to consider explanation of the assessee.

8. In the assessment years 1997‑98 and 1998‑99, the assessee has taken the following common grounds:

(1)"The learned CIT(A) is not justified in setting aside the dis allowanced made by the Deputy Commissioner of Income‑tax, Companies Circle‑16, Islamabad in relation to premium paid on Federal Investment Bonds (FIBS).

(2)The CIT(A) is not justified in restricting add‑backs in certain administrative expenses to 15 % . These should have been deleted in entirety."

In the assessment year 1998‑99, the assessee has also agitated the direction of the learned CIT(A) to tax interest income on FIBs on accrual basis as against receipt basis.

9. The Revenue on the other hand agitated the issues such as allowance of depreciation on the leased assets to the extent of the gross amount of lease rental, the allowance of rent payment in view of the alleged default of tax deducting, restriction of the addition in the P&L expenses under the specified heads and setting aside of the issue of premium on the FIBS which is a common ground to the assessee's appeals.

10. Issue of premium on the FIBs was. strongly argued by the learned counsel of the assessee and it was argued that learned CIT(A) should not have set aside the matter and he .should have decided the issue himself. The learned counsel of the assessee was asked to explain the nature of transaction involved. The learned counsel of the assessee submitted that the assessee has undertaken the transaction of Repo which involved the sale of certain assets subject to an agreement to repurchase same at some future date and difference between price of sales and repurchase is the profit earned by the financer. Learned DR however objects to such arguments with the submission 'that this aspect of transaction had not been considered at the assessment stage and it was never explained to the Assessing Officer. A perusal of the assessment order shows that the argument of the learned DR is forceful. According, to the explanation given by the learned AR of the assessee the Report transaction is in the nature of `pawn' transaction (Rehan). We feel that this issue is required to be thrashed at the assessment stage and no prejudice has been‑caused to either of the parties. Hence we refuse to interfere in the order of the learned CIT(A) on this issue and maintain setting aside of the issue of premium on FIBs.

11. On the issue of P&L addition we find that tile Assessing Officer has made the addition under various heads and learned CIT(A) has also allowed partial relief under different heads. The ground taken by the assessee has already been reproduced above which is found to be vague and against the rules of the Tribunal. The learned AR of the assessee was confronted on this issue and pointed out that numerous appeals of‑the Department have already been dismissed by the Tribunal in similar circumstances. However instead of seeking any other remedy, the learned AR of the assessee submitted. that the assessee should not be punished on technical grounds. We are not prepared to‑accord different treatment to the assessee compared to the Department. Hence, we dismiss assessee's, appeals on this issue on technical ground. As far as, departmental appeals on this issue are concerned, learned DR was invited to point out the basis of fixation of disallowance at 20% by the Assessing Officer which has been reduced to 15% by the First Appellate Authority. The learned DR was unable to point any such basis, hence all departmental appeals fail on this issue. The order of learned CIT(A), dated 26‑1‑2001 on this issue is maintained.

12. In the assessment year 1998‑99, the assessee has also agitated the .directions of the learned CIT(A) confirming the treatment of interest income on FIBs to be taxed on accrual basis as already mentioned in para. 6 above. The learned CIT(A) has given these directions in view of a decision of the Tribunal in the case of Askari Commercial Bank Ltd., a sister y concern of the assessee‑appellant, as already stated in para. 6 above. The assessee makes investment in the various Government bonds and accounts for the income. on such bonds on accrual basis i.e. on time basis, irrespective of the fact whether such income is receivable before the balance‑sheet date or after the balance‑sheet. Such accounting treatment is said to be given in view of the International' Accounting Standard No. IAS‑18. A question was raised by the Bench as to why this issue has arisen only in the year under consideration and not in the preceding year. It was submitted by the learned AR of the assessee that the Revenue had accepted the treatment given by the assessee in the computation in the past making the adjustments for such item. We have already reproduced the computation of income/loss as prepared by the assessee for the assessment year 1997‑98‑ in para. 2 of this order and we do not find any such adjustment in the computation or in the manner of assessment as reproduced in para. 3 above as is appearing in the computation for the assessment year 1998‑99 as reproduced in para.4 above. Irrespective of the veracity of such submissions of the learned AR of the assessee, we find that this issue was discussed in an earlier order of the Tribunal reported as 1994 PTD 1051 = 69 Tax 192 which incidentally was authored by the author of the present order. In that case also, the income of a bank had been assessed from the investment in on receipts basis in the earlier years. However, in the years .in which the dispute came before the Tribunal, the Revenue decided to tax interest income on accrual basis since the assessee had been maintaining the accounts on mercantile system basis and the facts and circumstances of that case were similar to those prevailing in the present case. The learned AR of the assessee was asked to explain this position as to why the decision given in that order, i.e. 1994 PTD 1051 supra, may not be followed in the present case as well and confirm the order of the learned CIT(A). The learned AR of the assessee however submitted that he did not agree with, the finding of the Tribunal in that case mainly for the reason that the interest income under consideration was taxable under the provisions of section' 17 of the 1979 Ordinance, which is a substantive provision of law and the accounting treatment given by the assessee could not be made to prevail over that section under section 32 of the 1979 Ordinance, which is a procedural provision of law. The learned AR has also elaborated that in the case of Askari Commercial Bank, the issue of chargeability of tax on such income was decided in favour of the assessee in the first two assessment years and in favour of the Revenue in the subsequent two years. It was submitted that the appeals/references in all four years had been filed before the High Court which have not been decided yet. It was further argued by the learned AR of the assessee that the substantive provisions have to prevail over the procedural provisions. It was elaborated by the learned AR that section 17 is a charging section which is substantive provision whereas section 32 is a procedural section. According to the learned AR of the assessee, the provisions of section 17 clearly lay down that the only interest receivable is to bb taxed and there is no mention of any accrued interest in section 17: The learned AR has tried to draw an analogy with the provision of section 19 which provides for taxation of income from house property on the basis of GALV whereas the accounts only reflect the actual‑ rent received or receivable. However, we are not prepared to enter into a hypothetical discussion and would like to contain ourselves to the issue under consideration. We have already considered the provisions of section 17 while deciding the earlier order reported as 1994 PTD 1051 supra. The only‑ new angle of this issue which had not earlier been raised is the prevailing of substantive provision over the procedural provision. However, we feel that the learned. AR has not argued the case from all the angles. Although section 17 does provide for chargeability of tax on interest income `receivable', the same section does not provide for any deduction to be allowed against such income. If the interest income on FIBs or other investment securities was to be taxed under section 17 in isolation, the assessee would not be able to claim any, expenditure 1hereagainst except what is provided in section 18 of then same Ordinance. The examination of this provision of the law, i.e. section 18 of the 1979 Ordinance, reveals that the assessee is only to be allowed actual interest `paid' on moneys borgowed for investment in such bonds. This would mean that the assessee will not be entitled to deductions even in. respect of the interest expense which is due for payment but not paid by the assessee. There are certain restrictions also applicable under the provision of section 18 of the 1979 Ordinance which have not been considered. Also we have to bear in mind another principle of accounting which requires that matching costs should be considered before income is determined. It is not the case of the assessee that interest payable on related borrowing is not being accrued. This treatment has been given by the Department and also approved by the Tribunal on the basis that the investment in these Government securities is a part of a normal business activities of the banks and financial institutions etc. In any case, this matter is pending adjudication by the honourable High Court in the case of Askari Commercial Bank Ltd. for the assessment years 1993‑94, 1994‑95 and 1995‑96 and also in the other cases. It is not the case of the learned AR of the assessee that this issue has been resolved tin favour of the assessee by the honourable Judges of the High Court.

13. The learned AR has also referred to the provisions of section 84 ,to stress that the interest is only taxable when it is receivable. We however are not convinced by this argument of the learned AR. The provision of section 84 is a deeming provision and such provision cannot l be applied generally.

14. For the reasons recorded above, we are not inclined to interfere in the order of the learned CIT(A) on this issue which is maintained.

15. With the above discussion we have considered and decided the assessee's appeals for the assessment years 1997‑98 and 1998‑99 and these are dismissed for the reasons recorded above.

16. In the assessment year 1999‑2000, the assessee has challenged the setting aside of the assessment by the CIT(A) in a summary manner. We have perused impugned order of the learned CIT(A). Although we do not appreciate summary order being passed by the departmental officials, however, in the present case we find that all the issues except for levy of minimum tax under section 80‑D are settled issues. These have been either decided by the Tribunal or by the First Appellate Authority in the past. The learned CIT(A) has directed the Assessing Officer to re examine in the light of appellate decision referred to in the impugned order which reframe the assessment after providing an opportunity of being heard to the appellant and produce the evidence in support thereof in accordance with the facts and on merit and under the law. We feel that instead of remanding the case to the First Appellate Authority for passing a speaking order. it would be more appropriate to confirm this order to the extent of the issues which have already been settled. However, we would like to deal with the issue of levy of minimum take under section 80‑D of the Ordinance 1979, separately in this order.

17. This brings us to the departmental appeals for the same assessment years. The issues relating to the extent to which depreciation on these assets is to be allowed, the treatment of lease related income like front and fee, have already been decided against the Revenue by the Tribunal. In the grounds of appeal, the Department has also challenged the directions of the learned CIT(A) on the issue of credit for unabsorbed and brought forward depreciation loss on the plea that the earlier order of the First Appellate Authority was in Appeal before the Tribunal. However, it has been conceded now that the Tribunal has already decided such appeals against the Revenue. The learned CIT(A) has given a similar finding in his order. Hence no interference is required on that issue either The Department has also agitated the directions of the First Appellate Authority to allow the expenditure incurred by the assessee on lease hold improvements, arrangement fees and exchange risk fees. The learned CIT(A) has allowed the expenditure on lease hold improvements in view of a decision of the honourable High Court as mentioned in his order and the learned DR is unable to displace such basis. On the issue of management fee expenditure, the learned DR is unable to point out any infirmity in the order of the learned CIT(A). The Assessing Officer has‑disallowed this expenditure with the observation that this expense is directly related to the credit facility in connection with acquisition of funds and also of the advantages of enduring nature. According to the Assessing Officer, this was not an expense for producing profits in the conduct of business. However, the Assessing Officer has not specified as to what type of enduring benefits had been obtained by the assessee by this expenditure. The assessee has explained that such fees were paid to acquire funds for the Company for providing leases to customers as the lease business is the main business of the assessee. Hence, we find no infirmity in the order of the learned CIT(A) on this issue. On the issue of exchange risk fee, again we find that the learned CIT(A) has relied on a decision of the Tribunal and we see no reason to interfere.

18. On the issue of premium on FIBs, we have already maintained the order of the learned CIT(A) while deciding the assessee's appeals as the issue had been set aside. Hence no interference.

19. The next ground of the Department is with regard to the allow ability of rent expenses for want of withholding tax. We find that the learned CIT(A) has allowed this expense after examination of certain evidence which was not produced before the Assessing Officer. The claim of the assessee before the Revenue was that of total payments, 50% pertained to the assessee‑Company and the other 50% pertained to the sister concern and that tax had only been deducted from the portion pertaining to the assessee. However, this explanation and issue requires examination at the assessment stage. Hence, we are inclined to set aside this issue and remand the same to the Assessing Officer for proper verification. The issue of other P&L add‑backs has already been decided by us in para. 11 above.

20. The last issue which requires deliberations in the assessee's appeal for the assessment‑years 1999‑2.000 is the issue of chargeability of minimum tax under section 80‑D of the 1979 Ordinance, on an assessee deriving income from leasing business. The assessee appellant in the present case was subjected to such minimum tax which has been set aside by the learned CIT(A). The plea of the assessee before us is that the nature of the business of the assessee is such that the minimum tax cannot be levied thereon as the assessee has no such turnover as envisaged in the provisions of section 80‑D of the 1979 Ordinance. Before proceeding any further, it would be useful to reproduce the provisions of section 80‑D of the 1979 Ordinance, which read, as follows:‑‑

80‑D Minimum tax on income of certain persons.‑‑‑(1) Notwithstanding anything contained in this, Ordinance or any other law for the time being in force, where no taxis payable or paid by a company or a registered firm, an individual, an association of persons, an unregistered firm or a Hindu undivided family resident in Pakistan or the tai payable or paid is less than one half per cent of the amount representing its However from all sources the a re ate of the declared turnover shall be deemed to behalf of the said or a registered firm, an individual, an association of persons, an unregistered firm or a Hindu undivided family and tax thereon shall be charged in the manner specified in subsection (2).

Explanation.‑‑‑ For the removal of doubt, it is declared that the expressions "where no tax is payable or paid" and "or the tax payable or paid" apply to all cases where tax is not payable or paid for any reason whatsoever including any‑loss of income, profits or gains or set off of loss of earlier years, exemption from tax, credits or rebates in tax, and allowances and deductions (including `depreciation) admissible under any provision of this Ordinance or any other lave for the time being in force.

(2)The Company or a registered firm, an individual, an association of persons, an unregistered firm or a Hindu undivided family referred to in subsection (1) shall pay as income tax‑‑‑

(a)an amount, where no tax is 'payable or paid, equal to one half per cent of the said turnover; and

(b)an amount, where tax payable or paid, is less than one; half per cent of the said turnover, equal to the difference between the tax payable or paid and the amount calculated in accordance with clause (a).

Explanation‑‑‑. For the removal of doubt it is declared that "turnover' means the gross receipts exclusive of trade discount shown on invoices or bills, derived sale of‑volts or from rendering in or supplying services or benefits or from execution of contracts.

(3)Nothing in. this section. shall apply to an individual, an association of persons, an unregistered firm or a Hindu undivided family in respect of any assessment. year commencing on, or after, the first date of July, 2001. (emphasis added).

21. 'The learned DR at this point submitted that the assessee was providing financing facilities to its customers which was a benefit. The, learned DR however rebutted that there was no benefit. to the customers since he has to pay the interest or mark‑up. Even otherwise, according to the learned AR of the assessee, every business transaction involves some benefits to both the parties. A mention was also made by the learned AR of the insurance business where an insurance company provides a cover against a huge possible loss for a consideration of smaller amount of premium.

22. We have considered the submissions and have also considered the provisions of law as reproduced above. Under the above provisions of law, minimum tax has to be paid by certain persons, including a company which the present assessee is. The minimum tax is payable on the basis of the turnover. If the tax paid or payable by a company is less than one half per cent of the amount representing its turnover from all sources, the minimum liability of tai is to' be determined at half per cent of the declared turnover of such company and such declared turnover is to be deemed to be the income of the company for charging the tax under subsection (2) of Section 80‑D. An explanation has been added to subsection (2) to spell out what the `turnover' means and the first meaning given is the gross receipts derived from the sale of goods or from rendering, giving or supplying ‑services or benefits etc. The term `turnover' is not otherwise defined in the income tax law as such. The learned AR of the assessee insists that the turnover for this, purpose is what has been defined in this explanation. Before examining this contention of the learned AR of the assessee, we would like to refer to the meaning of `turnover' as given in the Principles of Income Tax Law with International Tax Glossary by. Huzaima Bukhari and Dr. Ikramul Haq, which reads as follows:‑‑

"Turnover

Volume of business of an enterprise as set forth in the profit and loss account. It is usually measured by reference to the gross receipts, or gross amounts due, from the sale of goods or services, etc. supplied by the entity.".

In the Concise Oxford Dictionary., Ninth Edition, this term has been given the following meanings:

"turnover/.../n. 1 the act or an instance of turning over, 2 the amount of money taken in a business, 3 the number of people entering and leaving employment etc. 4 a small pie or tart made by folding a piece of pastry over a filing, 5 US Sport loss of possession of the ball to the opposing team".

Of the above meanings given in the Concise Oxford Dictionary, the Item No.2 is the only relevant part which says that the turnover means the' amount of money taken in a business which, to our minds, appears to be a basic essence of the definition of `turnover'. We are not really inclined to agree with the submission of the learned AR of the assessee that the explanation to subsection (2) of section 80‑D of the 1979 Ordinance, contains an absolute and exhaustive definition of the term `turnover' as this is an Explanation which has been introduced to remove the doubt and, prima facie, such doubts were there with regard to the treatment of trade discounts shown on invoices of bills. A plain reading of section 80D shows the intention of the Legislature td levy a minimum taxi on a company irrespective of whether it has earned any profit or not. The term `turnover' is a wide term and in our considered view in includes the receipts and accruals from the major business trading professional activity bf the Company and since the law says that the turnover from all sources must be taxed, it has to be from all sources and all activities of business of the assessee. However, we may, add here than those activities which are not in the ordinary course of the business of the assessee, such as the sale of fixed assets, would not form apart of the turnover. We also do not agree with the submission of the learner AR of the assessee that there is no benefit provided to the customers of the assessee. The assessee is engaged in the business of providing financial facilities to its customers and certainly this is a benefit to its customers by way of providing loans and credits and other financing facilities. Thus, in our considered view, the assessee cannot be excludes from the purview of the provisions of section 80‑D of the 1979. Ordinance. The issue has already been set aside and we find no reason to interfere.

23. As a result of the above discussion, all the appeals filed by the assessee are dismissed whereas the departmental appeals for the assessment years 1997‑98 and 1998‑99 are partly allowed to the extent indicated above.

C.M.A./951/Tax (Trib.)Order accordingly.