Income Tax Ordinance (XXXI of 1979)---

----First Schedule, Part III, para. A & S.10---Provision/liability for tax fell within the purview of the expression "income as retained for meeting working capital requirements" as used in para. A, Part III of the First Schedule of the Ordinance read with S.10 and thus was to be excluded from the total income for levy of surcharge.

Commissioner of Income Tax v. M/s. Pakistan Tobacco Ltd. 1988 PTD 66 fol.

1989 PTD (Trib.) 155 ref.

Shaikh Haider for Applicant.

Sirajul Haq for Respondent.

Date of hearing: 31st October, 1991.

JUDGMENT

MAMOON KAZI, J.---The assessee-Company declared an income of Rs.2,35,085 as per its original return. Subsequently the case was 'selected for detailed scrutiny and thereafter the income of the assessee was assessed at Rs.6,29,217. The taxes imposed were Rs.3,09,804 and the surcharge levied was Rs.15,977. Aggrieved by such assessment, the assessee went into appeal and the Commissioner of Income-tax (Appeals) directed that surcharge should be levied keeping. in view the earlier decision of the Income-tax Appellate Tribunal. It may be pointed out. that according to the earlier decision reported in 1989 PTD (Trib.) 155, the taxes payable were to be treated as income retained for purposes of requirement of the working capital. The Department went in appeal against the decision of the Appellate Commissioner. The learned Appellate Tribunal, however, agreed with the decision of the learned Commissioner. Thereafter, at the instance of the Commissioner of Income-Tax Zone-B, Karachi, the following question has been referred to this Court for its opinion:

"Whether on the facts and circumstances of the case, the Appellate Tribunal was justified in holding that provision/liability for tax falls within the purview of the expression income as retained for meeting working capital requirements' as used in para. A of Part III of the First Schedule to the Income-tax Ordinance, 1979 read with section 10 of it and hence it is to be excluded from the total income for levy of surcharge?"

Learned counsel have pointed out that the question involved has already been answered by a Division Bench of this Court in the case of Commissioner of Income-tax v. M/s. Pakistan Tobacco Ltd. (1988 PTD 66). It may be pointed out that the question referred to the learned Division Bench was answered in the affirmative. As the question has already been answered by a Division Bench of this Court, we also hold accordingly. The reference is, therefore, disposed of in similar terms. The parties shall bear their own costs.

M.B.A./C-253/KReference answered.