MUHAMMAD SAYEED AKHTAR, J.---A common question of law and fact is involved in C.T.R. No.4 of 1994, I.T.A. No. 182 of 1997 and I.T.A. No.183 of 1997, we propose to dispose of these three by a common judgment.
2. The respondent is a private limited company. It manufactures tractors parts and derives its income from the sale of the same. It declared its total sales as Rs. 94,19,413.00 for the assessment year 1989-90 out of which sales to the tune of Rs.33,24,521 is exempt from tax under Clause 98 of the Second Schedule of the Income Tax Ordinance, 1979. After the expiry of the afore-mentioned Clause 98, the tax exemption was claimed under Clause 125-B of the same Schedule. The Assessing Officer accepted the claim of exemption in respect of claimed sales of Rs.33,24,521.00 till the expiry of said Clause 98, i.e. 30th of June, 1988. After the said date the sales amounting to Rs.23,15,540.00 were taxed on the ground that Clause 98 of the Second Schedule to the Ordinance, expired on 30-6-1988. On appeal, the CIT Appeal, Zone-I, Lahore, vide order, dated 16-7-1991, did not agree with the contention of the assessee. The contention raised before the CIT (Appeals) was that after the expiry of Clause 98, the assessee was entitled to exemption on the sales of tractor parts manufactured by it as the same were covered under item No.21 of C.B.R. Notification No. S.R.O.
785(1)/86, dated 11 August, 1986, issued under sub-clause (a) of Clause 125-B, of the Second Schedule to the Ordinance, 1979, empowering the Board to exempt the profit and gains derived by the assessee. The appeal was .Preferred before ITAT, who vide its order, dated 27-2-1992, allowed the same, declaring all the receipts from the sales of the tractor parts exempt from taxation under Clause 125-B of the Second Schedule to the Ordinance. On an application under section 136 of the Income Tax Ordinance, 1979, the learned Tribunal framed the following question of law for decision by this Court.
"Whether on the facts and in the circumstances of the case the learned Tribunal was justified in holding that all the receipts from the case of Tractors parts are entitled to exemption under clause (125-B), Part-I of the Second Schedule to income Tax Ordinance, 1979?"
(a) Whether on the facts and circumstances of the case the respondent can avail exemption in different clauses at the same time and for the same business?
(b) Whether Income Tax Appellate Tribunal justified to allow the exemption when the establishment of the business was not made from 30-6-1986 to 30-6-1989?
(c) Whether the Income Tax Appellate Tribunal justified to allow the exemption under clause 125B when the respondent has already claiming the exemption under clause 98 of the Income Tax Ordinance and same was allowed by the Department?
(d) Whether the Income Tax Appellate Tribunal justified to allow the exemption to the respondent when the clause 98 relevant to the case of the respondent has been withdrawn?
(e) Whether the Income Tax Appellate Tribunal justified to uphold the order of the Commissioner of Income Tax (Appeals) without considering the facts of the case and law relevant to the exemption clauses and applicable to the case of the respondent?
3. The learned counsel for Revenue submitted that after the expiry of clause 98 of the Second Schedule clause 125-B of the same Schedule was not available and the assessee could not rely on Item No.21 of Notification S.R.O. No.785(I)/86, dated August 11, 1986. The receipts for sale of tractor parts were not subject to exemption. The tractor could not be considered a motor vehicle.
Conversely, the learned counsel for the respondents defended the impugned order.
4. We have gone through the judgment of the learned Tribunal, the relevant provisions of law and afore mentioned Notification S.R.O. No.785(I)/86, dated August, 11, 1986. Under clause 98, Part-I of the Second Schedule to the Income Tax Ordinance, 1979 any income derived by an assessee from the sale during the period commencing 1st July, 1968 and ending on 30th of June, 1988 of the Agricultural Machinery Tractor manufactured (not assembled) by him was exempt from tax. After the expiry of the said clause 98, the assessee claimed exemption under Notification S.R.O.
No.785(I)/86, dated 11-8-1986 issued under clause (125-B), Part I of the Second Schedule of the Income Tax Ordinance, 1979. Item No. 21 of the said notification reads as under:- "(21) Automotive parts and components used in motor vehicles of all sorts." The question involved in this case is whether the parts and components lB used in a tractor are to be considered as parts and components used in al The afore-mentioned clause 98 of Second Schedule to the Income Tax Ordinance, 1979 provided a special exemption from tax on income derived from the sale of the agricultural machinery/agricultural tractor. This clause died its on death on 30th of June, 1988. The special tax exemption provided by it came to an end on the said date. After the expiry of the provision relating to special tax exemption, the assessee was at liberty to take refuge under Clause (125-B) of the Second Schedule to the Income Tax Ordinance, 1979 S.R.O. No.785(I)/86, dated August 11, 1986 gave general tax exemption to the assessee on income derived from the sale of automotive parts and components used in motor vehicles of all sorts (underlining is ours). In the case the State v. Zia-ur- Rehman's and others (PLD 1973 SC 49) the Hon'ble Supreme Court observed as under:-- "It is well-established rule of interpretation that where in a statute there are both the general provisions as well as special provisions for meeting a particular situation, then it is the special provisions which must be applied to that particular case or situation instead of the general provisions."
"Therefore, specific provision has been made for grant of exemption in respect of Surcharge and Iqra Surcharge. Where specific provision is made to deal with a particular situation then it supersedes the general provisions to the same effect."
Now the question is whether the tractor can be considered as a motor vehicle. Neither the phrase 'motor vehicle' nor expression `tractor' has been defined in the Income Tax Ordinance, 1979 or the rules framed thereunder. In these circumstances we have to fall back on the dictionary meaning of the words. In the Concise Oxford Dictionary, 9th Edition the meaning of motor vehicle are given as under:-- "a road vehicle powered by an internal combustion engine."
Similarly the meaning of tractor in the same dictionary are as under:-- "a motor vehicle used for hauling especially farm machinery, heavy loads, etc, a traction engine."
The tax exemption is given to automotive parts and components used in motor vehicles of all sorts.
In our view the 'tractor' also falls within the purview of the 'motor vehicle'. We are fortified in our view by the language of Item. No.21 where the expression "motor vehicle of all sorts" is used. The legislature intended to provide tax exemption to the parts and components used in motor vehicles of all sorts including the tractor. The question posed by the learned Tribunal for consideration by this Court is answered in affirmative. The answer to the question also replies the pleas raised by the learned counsel for the Revenue. We do not find any substance in the questions framed by him. All the three appeals are dismissed leaving the parties to bear their on costs. .