DOST MUHAMMAD KHAN, J. - This single judgment shall also decide the following References:---
(i) T.R. No. 28/2006
(ii) C.I.T, v. Akhtar Munir T.R. No. 29/2006
(iii) C.I. T, v. Akhtar Munir T.R. No. 31/2006
(iv) C.7.T. v. Nizam Gul T.R. No. 32/2006
(v) C.I.T, v. Nizam Gul T.R. No. 33/2006 C.I.T, v. Nizam Gul
(Vi) T.R. No. 34/2006 C.I.T, v. Shahid Gul
(vii) . T.R. No. 35/2006 C.I.T, v. Shahid Gul
(viii) T.R.-No. 36/2006 C.I.T, v. Shahid Gul
(ix) T.R. No. 37/2006 C.I.T, v. Irshad Khan
(x) T.R. No. 38/2006 C.I.T, v. Irshad Khan *
(xi) T.R. No. 39/2006 C.I.T, v. Irshad Khan
(xii) T.R. No. 40/2006 C.I.T, v. Shahid Islam
(xiii) T.R. No. 41/2006 C.I.T, v. Shahid Islam ,(xiv) T.R. No. 42/2006 C.I.T, v. Shahid Islam
(xv) T.R. No. 43/2006 C.I. T, v. Malik Qeemat Khan
(xvi) T.R. No. 44/2006 C.I.T v. Malik Qeemat Khan
(xvii) T.R. No. 45/2006 C.I.T, v. Malik Qeemat Khan "(xviii) T.R. No. 48/2006 C.I.T, v. Muhammad Ishaq
(xix) T.R. No. 49/2006 C.I.T, v. Muhammad Ishaq
(xx) T.R. No. 50/2006 C.I.T, v. Muhammad Ishaq
(xxi) T.R. No. 51/2006 C.I.T, v. Muhammad Amjad
(xxii) T.R. No. 52/2006 C.I.T, v. Muhammad Amjad (xxiii) - T.R. No. 53/2006 C.I.T, v. Muhammad Amjad
2. Majority of the assesses in these Tax References are individual or partners (AOP) deriving income from purchase and sale of Real Estate (immovable property). Majority of them belong to the tribal area where the provisions of the Income Tax Ordinance have not been so far extended within the contemplation of Articles 246 and 247 of the Constitution of Islamic Republic of Pakistan, 1973.
3. The assessee in these Tax References made investment in property and on that account the Assessing * Officer holding them assesses in default, served upon, them notices which were responded but inspire of that fact they were proceeded against in an ex parte manner and was disallowed the exemption claimed under Clause (6F) inserted in the repealed Income Tax Ordinance, 1979 through, Finance Act, 1998 which had become effective from 1st July, 1998. For proper construction of the said provision' and with the view to ascertain the intent of legislature, the same is reproduced below:- "6F. The provisions of Section 13 or Chapter XI or Chapter XII shall not apply in respect of any amount invested in purchasing of any land or any other assets sold through public auction by the Federal Government {or a Provincial Government or a body established or controlled by such government: Provided that the exemption under this clause shall not be available on or after the 16th day of December, 1999."
4. Admittedly, the assessee in these Tax References purchased the properties in auction few months before coming into operation Clause (6F) inserted through Finance Act ibid but the substantial/entire price/value of the amount was. Paid/invested after the commencing date of the Finance Act, 1998 i.e. 1st July of 1998. Details in this regard have been given by the learned Tribunal in tabulation form in all the impugned judgments with reference to the date of investment/payments,
5. The learned Tribunal Income Tax, Peshawar Bench while accepting appeals of the assessee held the following view:- "
8. In view of the forgoing discussion, we have no hesitation to hold that as per Clause (6F) of Part- IV of the Second, Schedule to the repealed Ordinance, the amount invested in purchase of any asset through public auction upto 16.12.1999 is immune from probe. Therefore, no addition under Section 13 of the repeated Ordinance read with Section 111 of the Ordinance, 2001 for assessment years 1998-99 to 2001 could be made in the case in hand as the entire investment by the appellants is prior to the target date of 16.12.1999. Accordingly, the addition made on this score is deleted (appeals were allowed)."
6 Before us, the learned counsel appearing on behalf of the Commissioner Income Tax vehemently argued that for the purpose of construing the term.'"Invested" the date of making the bid and its approval shall be considered the date of investment and in this view of the matter as the assessee in all these cases have purchased the properties in open auction from government prior to the commencing date of Finance Act, 1998 containing exemption Clause (6F), therefore, the assessm ent made by the Assessing Officer was perfectly justified in law and the learned Tribunal has fallen into grave legal error while holding a contrary view.
7. In view of the submissions made at the bar on the above point of law, the real controversy stands reduced, to the interpretation and construction of the terms "Invested" and "Commencing date".
The terms "Invested" has been defined in Black's Law Dictionary, . Eighth Edition which means - An expenditure to acquire property or assets to produce revenue; A capital outlay. "Investment contract" has been defined the investment of money in a common enterprise with profits to come solely from the efforts of the others; an agreement or transaction in which a party invests money in expectation of profit derived from the efforts of the promoters or third party. A transaction in which an investor furnishes initial value or risk capital to a enterprise, a portion of that amount being subjected to the risks of the enterprise.
8. For the purpose of taxation further two terms i.e, "Investment indebtedness" and "Investment Property" would be also relevant which respectively means the debt incurred by a tax-payer to acquire or carry assets that may produce income while the latter has been defined by Black's Law Dictionary as any asset purchased to produce a profit, whether from rental income or resale.
9. Under the provision of the Contract Act the term "Invested" means the investment of full capital/credit for acquiring property or asset and establishing full domain over it is a true owner to get periodical or final profit by way of rent, lease or resale.
10. In the instant case, the assessee no doubt had offered bids before the commencing date of the Finance Act, 1998 but excepting the surrendering of "Call deposits" to the Privatization Commission or Disinvestment Authority, the actual value/price of the purchased property was paid during the period relevant schedule of the repealed Income Tax Ordinance, 1979 and was operative in the field. Thus, in, our view, the assesses invested their capital in the properties, purchased in open auction, during the period when the exemption clause was fully available to them, It would be highly unjust and paradoxical to tightly tag the investment/payment of the entire money paid during the exemption period with the date of the bid offered before the commencing date of Finance Act, 1998 i.e. 1st July, 1998. Both under the provision of Transfer of Property Act and that of the Contract Act for the completion of sale agreement irrespective of the mode and manner it is effected, the payment of entire sale consideration and delivery of possession of an immovable property would pass on title to the purchaser and looked at from this angle,, the legal term "Invested" for the present References would mean when the assessee made the final payment which in all the cases is well within the exemption period.
Simply the offering of bids and its acceptance by commission/authority indeed may be construed the incurring of debt liability which was payable on future dates according to the schedule of payments and on no premises it can be regarded the investment of capital by then moreso, when it is not the case of the Assessing Officer/Revenue Department that the entire amount of invested capital was in the hands of the assesses at the time when the bids were offered.
11. It is cardinal principle for construing the Tax Laws that imposition, levy or recovery of tax is a kind of < penalty, therefore, in case of any ambiguity in a taxing provision which is open to two construction, one favouring the Revenue Department and the other goes in favour of tax- payer/assessee then in that case the construction which favour the latter shall be acted upon and on this principle too albeit, we see no ambiguity in the language of the Statute, the assesses were not liable to tax.
12. The exemption Clause (6F) is a beneficial provision, the primary object and visible intent behind it was to prompt the National and International Investors to invest capital by purchasing property/assets within the country to generate and ensure maximum inflow into the country's exchequer reserves. To place a contrary construction on this beneficial provision of law would defeat the clear intent of the Law Makers and would ultimately bring to naught the object and purpose for which it was enacted.
13. For the afore-mentioned reasons, we see. No reason muchless plausible one to disagree with the view taken by the learned Appellate Tribunal Income Tax, the construction placed by it on the legal term as discussed above is well-founded because if a different view is taken that would result into absurdity and patent injustice which would commit violence to the clear intent of the Law- Makers. Accordingly, the law point formulated for the Court is answered in the affirmative and it is held that the learned Income Tax Appellate Tribunal was perfectly justified in holding the above view which is legally tenable being in accord with the principle of justice and is, therefore, maintained. All these Tax References are, thus, dismissed and full effect be given to the judgment of the Tribunal as required by the law.