Law: Income Tax Ordinance, 1979

Section: 10&FirstSched.,PartII,Cl.A(1)(v)

(a) Income Tax Ordinance (XXXI of 1979)---S. 10 & First Sched., Part II, Cl. A(1)(v)---Super-tax rebate ---Assessee, deriving income from sale of packed milk, loose milk, butter, cream and ghee--¬Assessee, being engaged in the processing and preserving of milk, which was an article of food, was entitled to 10% rebate in super-tax. (b) Income Tax Ordinance (XXXI of 1979)--- ----First Sched., Part II, Cl. A(1)(v)---Term "processing"---Meaning---Whenever a commodity undergoes a change as a result of some operation performed on it or in regard to it, such operation would amount to processing of the commodity--¬Nature and extent of the change is totally immaterial. Sri Om Prakas Gupta v. Commissioner of Commercial Taxes (1965) 16 S.T.C. 935; Chowgule & Co. (Pvt.) Ltd. v. Union of India (1981) 47 Sales Tax Cases 124 and Messrs Rafhan Maize Products Company v. C.I.T. 1988 PTD 571 ref. (c) Words and phrases--- ......Processing"---Meaning. ORDER MIAN ABDUL KHALIQ (JUDICIAL MEMBER).---For the assessment years 1984-85 and 1985-86 the Department has come up in appeals against a combined order passed by the learned C.I.T. (A) Zone-1, Lahore, dated 25-11-1986 on the issue of allowance of 10% rebate of super-tax under clause A(1)(v) of Part II of the First Schedule to the Income Tax Ordinance, 1979 (hereinafter referred to as the Ordinance). 2. The facts in brief are that the assessee, a Private Limited Company, derived income from sale of packed milk, loose milk, butter, cream and ghee. In the return for the charge year 1984-85, 10% super-tax rebate was claimed on sale of packed milk but the I.T.O. while making assessment under section 62 of the Ordinance on 30-12-1985 did not adjudicate that issue. Super-tax was charged at the normal rate of 25%. Subsequently on 25-2-1986 the assessee-company moved an application before the I.T.O. for rectification of charged rate of super-tax. It was claimed before the I.T.O. that the company being involved in processing of milk was entitled to super-tax rebate of 10% under clause A(1)(v) of Part II of the First Schedule to the Ordinance. The I.T.O. vide order dated 11-3-1986 rejected the claim holding that the company's nature of…

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