Income Tax Ordinance (XXXI of 1979)---

----First Sched., Part III, Para. A & S.10---Amount of tax liability falls within the purview of the expression "income as has been retained for the purpose of capitalization or for meeting working capital requirement" as used in Para. A of Part III of the First Sched. to the Income Tax Ordinance, 1979 and has to be excluded from the total income for levy of surcharge.

Commissioner of Income Tax v. Pakistan Tobacco Company (1988) PTD 66 fol.

Sheikh Haider for Applicant. Nemo for Respondent.

Date of hearing: 19th November, 1991.

JUDGMENT

NASIR ASLAM ZAHID, J.---On an application under section.136(1) of the Income Tax Ordinance, 1979, moved by the Department, the Income-tax Appellate Tribunal has referred the following question for our opinion:--

"Whether on the facts and in the circumstances of the case, the Appellate Tribunal was justified in holding that the amount of tax liability falls within the purview of the expression "income as has been, retained for the purpose of capitalisation or for meeting working capital requirement" 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 was to be excluded from the total income for levy of surcharge?"

2. The matter refers to assessment year 1980-81 of the assessee. We have heard Mr. Sheikh Haider, learned counsel for the Department. In earlier decisions, this Court has decided this question against the Department. Detailed decision of the Court is given in the case of Commissioner of Income Tax v. Pakistan Tobacco Company (1988) PTD 66. Mr. Sheikh Haider concedes to this position but submits that the Department has taken the matter to the Supreme Court where the appeals tiled by the Department are pending.

3. Following our earlier decisions, the question referred to us in the present reference application is also answered in the affirmative.

M.B.A./C-263/KReference answered.