Law: Income Tax Ordinance, 1979

Section: SecondSehed.,Part1,cl.125

Income Tax Ordinance (XXXI or 1979)-----Second Sehed., Part 1, cl. 125 Exemption from tax Requirement Existing companies could claim exemption under c1.125, Second Sched . Part I. Income Tax Ordinance, 1979 Conditions to be fulfilled by existing companies to claim exemption under cl. 125 of Second Sched., Part I of the Ordinance. ORDER In these appeals filed against the order of the (earned C.I.T.(A) Zone 1, Karachi, a number of grounds have been taken but the preliminary objection raised by the learned counsel, Mr. Siraj ul Haque, relates to rejection of assessee's claim for exemption under clause 125 of the Second Schedule. There are also cross appeals filed by the department against grant of exemption to the assessee under clause 125 of the second schedule to the' Income Tax Ordinance, 1979. Since identical issues are involved in all these appeals we propose to dispose them of by this combined order. Presenting the sequence in which the company was granted exemption by the department and also refused in certain years, Mr. Siraj ul Haque, the learned counsel pointed out that during the year 1984 85 exemption was claimed for the first time when the industrial undertaking was set up under clause 125. The I.T.O. for reasons explained in the assessment order refused to grant exemption which was later confirmed in appeal by the learned AA.C. In 1985 80 the claim for exemption was again refused but in appeal the learned A.A.C. granted the exemption. Again for the assessment years 1986 87 and 1987 88 the learned C.I.T.(A) granted the exemption. Although for both the years exemptions claimed were refused by the Assessing Officer. In the assessment year 1988 89 while the I.T.O. consistently refused the grant of exemption the learned C.I.T.(A) this time confirmed the refusal. Giving the brief history of the case, it is pointed out that company was incorporated on Ist June, 1974 for manufacture and export of garments besides general business done by the assessees. He also drew our attention to the provisions of clause 125 of the Second Schedule Part 1 to the Income Tax Ordinance which reads as under: "Rule 125 Profits and gains derived by an assessee from an industrial…

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