Law: Income Tax Ordinance, 1979

Section: 22(c),SecondSched,Cl,(65)

(a) Income Tax Ordinance (XXXI of 1979)---S. 22(c) & Second Sched., Cl. (65)---Receipt of cash reward earned by assessee on account of excellence in export---Taxability---To maintain excellence in manufacturing or other business activity though possible, but its recognition or approval by Government or private agency in future could never be certain---Such kind of receipts could not be anticipated with reasonable certainty, thus, same could not be taken to be recurring or a regular receipts---Such receipts though relatable to business undertaken by assessee, but same could not be said to have arisen from business or exercise of profession by assessee---Such receipts were casual and non-recurring, thus, were not taxable. Ramanathan Chettiar v. CIT (1967) 63 ITR 458;. Malick (B) v. CIT (1986) 67 ITR 616 ; Messrs Mohd. Abbobacker Saheb v. Commissioner of Wealth Tax 2001 PTD 831; Punjab Small Industries Corporation, Lahore v. Commissioner of Income Tax Commpanies Zone, Lahore 2001 PTD 2282; Commissioner of Income Tax, Zone `B', Karachi v. Messrs Sandoz (Pak.) Ltd. 1989 PTD 607 and The Commissioner of Income Tax v. Messrs Smith Kline and French of Pakistan Ltd. and others 1991 PTD 999 rel. (b) Income-tax--- ----Receipt---Taxability and exemption from tax---Burden of proof---Burden to prove a receipt falling within taxing provision would lie on revenue---In case of a receipt evidently in nature of income, burden would lie on assessee to prove that it -was not taxable for falling within exemptions provided by law. JUDGMENT NASIM SIKANDAR, J.---The respondent, a private limited company engaged in manufacture and sale of electric meters, returned net loss for the year 1989-90 at Rs.6,48,801. Instead an assessment was framed on 5-5-1990 at taxable income at Rs.30,11,137. In the process the Assessing Officer disallowed claimed exemption in respect of an amount of Rs.l million received by the respondent/assessee from Government of Pakistan as "highest Engineering Goods Export" award for the exports made during the year 1987-88. The claim was based upon clause 65 of the Second Schedule to the Income Tax Ordinance which at the relevant time read as under:-- "Casual…

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