Income Tax Ordinance (XXXI of 1979)---

----Ss.30, 136 & 156--- Appeal to High Court---Export rebate on interest income-- Revenue/Department had claimed that common question of law had arisen out of consolidated impugned order of Tribunal viz., "whether in the facts and circumstances of case Income Tax Appellate Tribunal was justified to uphold the decision of Commissioner Income Tax (Appeals) that Export rebate was allowable to assessee Company in interest income received on T.D.R's. whereas interest income on T.D.R's. was assessable under S.30 of Income Tax Ordinance, 1979 being income from other sources and was distinguishable from export business income" ---Issue of allowing of export rebate on interest income received in T.D.R's was neither considered nor ruled upon by Appellate Tribunal---Division Bench of Appellate Tribunal confined itself to adjustment of interest income paid on borrowed capital---Question of allowing of export rebate on interest income having never been ruled upon by Appellate Tribunal, High Court refused to entertain question for consideration and reply as question raised did not arise out of order of Appellate Tribunal.

Nemo for Appellant.

Nemo for Respondent.

Date of hearing: 13th July, 2004.

JUDGMENT

NASIM SIKANDAR, J.---In these further appeals under section 136 of the late Income Tax Ordinance, 1979 the Revenue claims that following common question of law arises out of the consolidated impugned order of the Tribunal dated 8-1-1998:

"Whether in the facts and circumstances of the case learned ITAT was justified to uphold the decision of CIT (Appeals) Sialkot that -export rebate was allowable to the assessee company on interest income received on TDRs whereas interest income on TDRs is assessable under section 30 being income from other sources and is distinguishable from export business income. "

2. On going through the statement of the case in the perspective of the impugned order of the learned Tribunal we are not inclined to agree that the question as framed does arise out of the order of the Tribunal. It appears that after framing of original assessment the Assessing Officer served the assessee with a show-cause notice and subsequently amended the assessment by rectifying the original order under section 156 of the late Ordinance. On challenge that order was cancelled by the CIT (Appeals) and the learned Tribunal by way of the impugned order refused to interfere. The relevant para. (3) of the impugned order of the learned Tribunal reads as under:---

"3. The respondent is a private limited company which was assessed under section 62 (sic) Rs.69,56,542 and Rs.65,99,199 for the respective assessment years. On an audit objection the Assessing Officer passed rectification order under section 156 whereby it was declared that the assessee was not entitled to take export rebate to the tune of Rs.50,969 and Rs.59,074 for the respective years, as an amount of Rs.2,52,000 accrued to them, as bank interest as mark-up on TDR. When the Assessing Officer issued notice, it was replied by the respondent that for the assessment year 1990-91 the Bank charged mark-up against the loan advances under the refinance and bill purchase at Rs.9,86,797 and against this mark-up the Bank adjusted interest. It was contended by the learned A.R. of the assessee that during the assessment year 1990-91 the bank (H.B.L.) has charged the amount of mark-up against the loan advanced under the re finance and bill purchase at Rs.96,797. Against this mark-up the bank adjusted interest of Rs.50,969 for the assessment year 1990-91 and the balance amount of mark-up at Rs.935,828 was debited to the P&L A/c. The same is the situation applied in the next assessment year whereby the Bank charged mark-up on the loan advance to the tune of Rs.74,36,944. Against this mark-up the interest of TDR at Rs.58,074 was adjusted and the balance mark-up of Rs.668,870 was paid to the Bank which amount was debited to the P&L A/c. This contention of the respondent has been admitted in the rectification order of the Assessing Officer."

3. A bare reading of the above para. of the impugned order of the learned Tribunal makes it vividly clear that the issue of allowing of export rebate on interest income received on TDRs was neither considered nor ruled upon by the learned Tribunal. The learned Division Bench of the Tribunal confined itself to adjustment of interest income accrued on TDRs against interest income paid on borrowed capital. The question of allowing of export rebate on interest income having never been ruled upon by the learned Tribunal, we will refuse to entertain the question as framed for our consideration and reply.

4. The appeal is dismissed. The order will also govern I.T.A. No. 306 of 1998.

H.B.T./C-36/LAppeal dismissed.