JUDGMENT

SYED MANSOOR ALI SHAH, Judge.---The brief facts of the case are that Messrs Mari Gas Company Limited, Islamabad (hereinafter referred to as the "Respondent") is a public limited company registered under the Companies Ordinance, 19841(now the Companies Act, 20172) engaged in the business of exploration, production and distribution of gas. The Respondent filed their return of income for the year 1999-2000 with gross receipts from the sale of petroleum at Rs. 694,187,000/- for the assessment year 1999-2000 and claimed Rs. 104,128,050/- (15% of gross receipts representing wellhead value of production) as an allowance pursuant to Rule 3, Part I of Fifth Schedule to the Income Tax Ordinance, 1979 (the "1979 Ordinance"). Subsequently, the Petitioner passed an assessment order dated 21.05.2002 under Section 62 of the 1979 Ordinance holding that the amount of royalty payments made by the Respondent to the Government should have been deducted from the Respondent's gross receipts when calculating...