JUDGMENT NASIM SIKANDAR, J. in this further appeal under Section 136 of the late Income Tax Ordinance, 1979 the Revenue through Commissioner of Income Tax/Wealth Tax Companies Zone, Islamabad claims that following question of law has arisen out of the impugned order of the Income Tax Appellate Tribunal, Islamabad Bench, Islamabad dated. 29.6.1999:--- "Whether on the facts and in the circumstances of the case, the learned ITAT was legally justified to confirm the order of the CIT(A) regarding deletion of addition u/s. 12(18) of the Income Tax Ordinance, 1979 made by the assessing officer to the assessee-Company's income on account of cash loans declared in the balance sheet as having been received from directors?
2. After hearing the learned counsel for the Revenue we will hold that the issue raised in the question of law as framed already stands resolved against the Revenue in our judgment recorded on 6.2.2001 in ITA No. 491/2000 in re: M/s. Mr. Fabrics (Pvt.) Limited vs. Income Tax Appellate Tribunal, Lahore. The facts in hand are strikingly similar to those which were considered by us in the aforesaid judgment. Our reasons to hold against the Revenue as contained in paras 4 to 13 read as under:- "4. in ITR No. 321/2000 the assessee is again a private limited company. For the assessment year 1994-95 no income was returned on the ground that no business activity had been undertaken.
However, the IAC after issuance of show cause notice and on rejecting defence taken up before him proceeded to treat the share deposit money at Rs. 18,7,98,138/- as its income under the said deeming provisions of the Ordinance. The reason assigned again being that the aforesaid sum shown as share deposit money was in excess of the authorized - capital of the company which had already been fully subscribed. According to the IAC the company was not competent to call for deposit of money in excess of the authorized capital. Accordingly, ds in the other two cases, it was taken to be a loan under the grab of share deposit money and added towards income.
5. It is the case of the appellants that neither the original assessments were prejudicial to the interest of the revenue nor the amounts received as advances could be treated as deemed income, in this regard it is pointed out that in all the assessment years involved these provisions were attracted only to sums "claimed or shown to have been received" as "loan" while neither these sums were "claimed" nor shown to be "loan". By relying upon Dictionary meaning of the word "loan" as given in 6th Edition of Black's Law Dictionary page 1936, the Shorter Oxford English Dictionary page 1227 Volume-I and Chambers 20th Century Dictionary page 739 it is asserted that share deposit money could never be taken to mean a "loan". To explain the terms, reliance . Has further been placed on a reported judgment cited as Gurcharan Das and another vs. Ram Rakha Mat (AIR 1937 Lah. 81). Reference is also made to re: Venkatakrishna Rice Company vs. CIT (1987) 163 ITR 129, re: CIT vs. Nathimal Gayalal (1973) 89 ITR 190, re: C.W.T. Southern Region Karachi vs. Abid Hussain (1999 PTD 2895), re: C.I.T. Patiala vs. Piara Singh (1972) 83 ITR 678, re: Chairman Evacuee Trust Property West Pakistan, Lahore vs. Muhammad Din and another (PLD 1971 Lah. 217), re: Abdul Hameed Sahib and others vs. Rehmat Bi (AIR l96^Madras 427.(V 52 C 151) and re: Mian Abdul Hameed Puri and 5 others vs. Federation of Pakistan (PLD 1979 Lah. 252) to claim that the share deposit money did not answer the requirement of law to be added as deemed income. Reference is also made to circular No. 6 of 1987 dated July 5, 1987 wherein these provisions were explained by CBR on their introduction in the statute book through Finance Act 1987. Reference is also made to re: C.I.T. North Zone (W.P.) Lahore vs. Crescent Textile Mills Ltd. (1974) 29 Tax 242.
6. The revenue on the other hand justifies the action of the IAC in cancelling the assessment and treating the aforesaid sums as seemed income. The revising of the assessments in supported by placing reliance upon re: Duggal & Co. Vs. CIT (1996) 220 ITR 456, re: K.A. Remaswamy Chettiar and another vs. C.I.T. (1996 220 ITR 657).
7. Before proceedings to consider the submission made from both sides it appears relevant to reproduce the provision of section 12(18) as inserted by Finance Act, 1987:- "Where any sum, or the aggregate of sums, claimed or shown to have been received as loan by an assessee during any income year commencing on or after the first day of July, 1987, from any person not being a banking company, or a financial institution notified by the Central Board of Revenue for this purpose, otherwise than by a crossed cheque drawn on a bank, exceeds (fifty) thousand rupees, the said sum or the aggregate of sums shall be deemed to be the income of the assessee for the said income year chargeable to tax under this Ordinance: Provided that, where the said loan is claimed or shown by way of the explanation, referred to in subsection (1) of section 13, in a case to which the first proviso to the said subsection applies the income under this sub section shall relate to the assessment year referred to in the said proviso."
It was by Finance Act, 1998 effective on 1.7.1998 that the words 'advance' or 'gift' were also added to expand the operation of the provision. Admittedly that amendment in law is not attracted to any of the assessee inasmuch as their case pertained to earlier assessment year's and finalized before the aforesaid amendment in 1998 bringing in the words 'advance' and 'gift' to attract the mischief the provision was made, it is, therefore, clear that at the relevant time in these cases no addition of the kind could be made before the amount received by the company was held to be a 'loan', in our view the share advance money indicated in the books of accounts/balance sheet of the companies could by no imagination be treated as a loan. The concerned ICAs cancelling the assessm ents and deeming these amounts as incomes did not elaborate as to how they treated the share advance money as 'loan', it was their personal view that the aforesaid sums had been introduced in the books of accounts as share deposit money but factually they were loans.
However, nothing was brought no record to support that in the given facts the share deposit money was in fact loan, in one of the orders under section 66-A the concerned ICA relied upon a judgment of the Income Tax Appellate Tribunal to drive home that these amounts were loan simplicit of and, therefore, could be deemed as income under the said provisions of the Ordinance, in that judgment the Tribunal expressed the view that similar sums shown as share deposit money were only to defeat the purpose of the legislation. However, we do not subscribe the view of the Tribunal which was based upon the so-called purposive approach in interpreting the provisions.
Even if that approach was 8 C.L. Pakistan Company & Tax Law Reports (P.C.T.L.R.) Vol. X justified, it was only fictitious loans which were intended to be curbed and that too which had so been 'claimed' or 'shown'.
8. Irrespective of the factual position as to the extent of the authorized capitals of the assessee/companies the revenue had no business to pick up faults with the intention an First that there was a "loan" received by an assessee and secondly that it was so claimed are shown by him. Where any of the two requirements were not answered, the provisions were not attracted. Subsequent amendment in the year, 1998 rather supports the case of the assessee/appellants that at the relevant time an advance irrespective of its nature could not be deemed as income of the assessee. Mr. Ibrar Hussain Naqvi, Advocate, learned counsel for one of the assessee has relied upon a Full Bench judgment of the Allah Abad High Court in re: C.I.T. Kanpur vs. Nathimal Gaya Lai (1973) 89 LTR 190. in that case it was inter alia held that the provisions creating a legal fiction had to be interpreted in such a manner as it did not cause injustice to a party. According to the learned Judges even when the Court steps into the world of legal fantasy the principle of equity and justice cannot be lost sight of. For a strict and narrow interpretation of the word "loan" learned counsel has also relied upon as re: Commissioner of Wealth Tax vs. Abid Hussain (1999 PTD 2895). The meaning of the word "loan" in the aforesaid three dictionaries as also the view of this Court in re: Gurcharan Das (Supra) makes it absolutely certain that share deposit money can never be or amount to a "loan" which is necessarily a sum to be returned after a certain or uncertain period with without interest.
9. It will be seen that in all the cases before us ultimately not only the authorized capital of the appellants were increased but also share were issued against the deposits to the respective applicants. The findings of this Court in re: CIT vs. Crescept Taxtile Mills Ltd. (Supra) support the claim of the applicants that the amounts deposited by Share-holders were proper share capital and that issuance of share certificates to existing Share-holders was not necessary.
10. We are also in agreement with the contentions of the appellants that at the relevant time the express mention of the word 'loan' excluded all other similar or equivalent terms, transactions, of nature of the receipts. According to the findings of the Court in re: Chairman Evacuee Trust Property vs. Muhammad Din and another (supra) no maxim of law was of more general uniform application than "expression unius est exclusive alterius." According to their Lordships whenever a statute limits a thing to be done in a particular form, it necessarily includes in itself a negative, viz. That the thing shall not be done otherwise. Therefore, in our view both the IAC's stretched their powers under section 66- A unnecessarily to hook the appellants before us. They even acted in disregard of the circular No. 6/87 dated July 5, 1987 which explained the provisions of section 12(18) when these were introduced. That being the first reaction of the revenue and its interpretation of the provisions, it had to be given serious thought at least by the revenue officers.
11. Learned counsel for the appellants also appear correct in suggesting that the purpose of introduction of the provisions of section 12(18) of the relevant time was to check fictitious loans and it was after quite some time that it was realized that the scope of the provisions needed to be expanded, it is also our opinion that no addition of the kind could possibly be made nor the defence taken by the appellants rejected without recording a finding of fact that these sums were injected in the business and were used as capital, circulating or otherwise. in other words the defence of the appellants/assessee could have been demolished only by recording a finding of fact that the alleged share deposit monies were factually used in the business and therefore, could be taken as "loan" taken for catering the capital needs of the companies. Such an exercise is absent in the cases of the appellant before us. Therefore, the findings of this Court is re: Prime Commercial Bank and others vs. Assistant Commissioner of income Tax (1997 75 Tax 1 (H.C. Lahore) are relevant, in that case a single Bench of this Court on the authority of an earlier view held in K.G.
Old Principal Christian Technical Training Centre Gujranwala vs. -Presiding Officer Punjab Labour Court Nothern Zone and 6 others (PLD 1976 Lahore 1097) found it to be a settled prposit on that generally an amendment is brought to being out a change in that state law unless the amendment as clarificatory or declaratory in nature, in the present case there is nothing to show that the amendment in section 12(18) by Finance Act, 1998 was brought about to clarify the earlier provision and not to bring a change in it. All the more so when the amendment was not given retrospective effect as normally clarificatory or declaratory amendments are given.
12. Lastly we will also agree that the settled principle of taxing statutes that where two interpretations are equally possible then the one favourable to the subject is to be adopted is attracted in this case. The principle can also at times be extended to factual situations warranting application of deeming provisions, it means where the transaction can equally be placed within or outside the dividing taxing line, the one falling outside should be preferred against the one falling inside.
13. Since we have found that the provisions of section 12(18) at the relevant time were not applicable to similar facts earlier found by the Tribunal, the exercise of revision jurisdiction as consequence thereof is also found to b illegal as the original assessments were neither erroneous nor prejudicial to the interest of revenue."
3. Accordingly our answer to the aforesaid question is in the affirmative.
4. Appeal rejected.