VS, 1994 PTD-KARACHI-HIGH-COURT-SINDH 496 (1993)

(a) Income-tax Act (XI of 1922)---

----First Sched., R. 6 & S.10(7)---Provision/liability for tax has to be excluded from the total income for levy of surcharge.

Commissioner of Income-tax v. Phoenix Assurance Co. Ltd. 1991 PTD 1028 rel.

(b) Finance Ordinance (XXV of 1980)---

----Sched. I, Part III, para. A---Surcharge---Surcharge has to be levied on tax on difference between the returned income and assessed income.

Commissioner of Income Tax v. Pakistan Tobacco Co. Ltd. 1988 PTD 1066 fol.

(c) Finance Ordinance (XXV of 1980)--

----Sched. I, Part III, para. A---Surcharge---Amount of tax paid by the assessee has to be treated as retained income for meeting the working capital requirement of the business and no surcharge is leviable on such taxes which are not in the hand of assessee.

Commissioner of income Tax v. Pakistan Tobacco Co. Ltd. 1988 PTD 1066 fol..

Shaik Haider for Applicant.

Muhammad Fareed for Respondent.

Date of hearing 31st March, 1993.

JUDGMENT

NASIR ASLAM ZAHID, C.J.---In respect of the Assessment year 1979-80 of the respondent/assessee, the application under section 136(1) of the Income Tax Ordinance, 1979, having been dismissed by the learned Income Tax Appellate Tribunal, the Department has filed the present application under section 136(2) of the Ordinance, seeking opinion of this Court in respect of the following three questions:

"(1) Whether on the facts and in the circumstances of the case, the learned Income Tax Appellate Tribunal was justified in deleting the addition of Rs.10,34,500 made by the Income Tax Officer on account of provision for taxation as the provisions are not the determined liability and therefore not allowable under the Repealed Act/Ordinance?

(2) Whether on the fads and in the circumstances of the case, the learned Income Tax Appellate Tribunal was justified in confirming the relief given by the learned Commissioner of Income Tax (Appeals) to the extent that Surcharge be levied on tax on difference between the returned income and assessed income?

(3) Whether on the facts and in the circumstances of the case the learned Income Tax Appellate Tribunal was justified in holding that the amount of tax paid by the assessee should be treated as retained income for meeting the working capital requirement of the business and that no Surcharge is leviable on such taxes which are not in the hand of assessee?"

2. We have heard learned counsel for the parties: It is informed by learned counsel that all tae three questions are already covered by decisions given by this Court/Supreme Court of Pakistan.

3. In respect of the first question relating to provision for taxation, reference can be made to the decision of the Supreme Court in the case of Commissioner of Income Tax v. Phoenix Assurance Co. Ltd., reported in 1991 PTD 1028. As regards the second and third questions relating to Surcharge, there are various decisions of this Court. Detailed judgment of this Court is given in the case of Commissioner of Income Tax v. Pakistan Tobacco Company Ltd., reported in 1988 PTD 66.

4. The decisions given by the Supreme Court and this Court are against the Department. In view of the earlier judgments by the superior Courts, we find no merit in this application which is dismissed but with no order as to costs.

M.B.A./C-310/KReference answered.