Through this application under Section 136(2) of the late Income Tax Ordinance, 1979 the petitioner M/s. Kohinoor Energy Limited, Lahore seeks admission and answer of the following questions of law which are stated to have arisen out of the impugned order of the Income Tax Appellate Tribunal, Islamabad Bench, Islamabad dated 27.6.2001:-
(1) "Whether the Income Tax Appellate Tribunal was justified in upholding the Assessing Officer's action of denying the exemption under clause 176 of Part I of Second Schedule of the Ordinance and assessing the applicants interest income from Bank deposits for the assessment year 1995-96 under the head "income from other sources" Under Section 30 of the Income Tax Ordinance, 1979?
(2) Whether the Income Tax Appellate Tribunal was not justified in setting aside the Assessing Officer's action of not allowing proportionate interest expenses under Section 31 (1)(b) of the Income Tax Ordinance, 1979 against the interest income assessed by the Assessing Officer under Section 30 of the Income Tax Ordinance, 1979 instead of directing that the said proportionate interest expenses are to be allowed as deduction?"
2. Earlier these questions were refused to be referred to this Court by the same Bench of the Appellate Tribunal on 10.1.2002.
3. The petitioner/assessee is a power project company incorporated at Lahore in April, 2004. During the assessm ent year under consideration no business was conducted as the project for generating/distribution and selling of electric power to Water & Power Development Authority was in completion process. The assessee filed Nil income return. Its claim for exemption of interest income earned during the period was declined by the Assessing Officer. He maintained that income from interest was chargeable to tax under Section 30 of the late Income Tax Ordinance, 1979 as "income from other sources". The assessee failed before CIT (Appeals) as well as the Tribunal.
4. After hearing the learned counsel for the parties we are of the view that the issues raised in the aforesaid questions already stand decided by this Court in case of another Energy Company raising a similar claim in re: M/s. AES PAK GEN (Pvt.) Company, Lahore Vs. Income Tax Appellate Tribunal, Lahore and another (2006 PTD 1). In that case following questions of law were considered and answered in the affirmative:--
(i) "Whether on the facts and the circumstances of the case, the learned Income Tax Tribunal was right in holding that exempt profits under clause 176 of the Second Schedule to the Ordinance, 1979 read with Section 5(2) of the Protection of Economic Reforms Act, 1992 do not include profits on Bank accounts maintained wholly and solely for the purpose and in connection with the power generation plant?
(ii) Whether on the facts and the circumstances of the case, the learned Income Tax Tribunal was right in holding that no borrowing cost can be set off against income from Bank deposits which were necessarily kept for the purpose of meeting lenders covenants under agreement with lenders?
(iii) Whether on the facts and the circumstances of the case, the learned Income Tax Tribunal was justified in holding that exemption from tax is only available to income from sale of electricity and not from power generation project covering all the segments of power generation project income?"
5. The view adopted by this Court in the above judgment also finds support from the ratio settled by the Hon'ble Supreme Court of Pakistan in re: Generater Pakistan Limited and others Vs. Income Tax Appellate Tribunal of Pakistan, Lahore and others (2004 SCM R 1319).
6. For the various reasons stated in the aforesaid judgments our answer to Question No. 1 is in the affirmative. As far Question No. 2 is concerned, we will refuse to answer the same. As a general rule mere remand of a matter does not give rise to a question of law to be considered and answered by this Court.
7. Disposed of.