Law: Companies Profits (Workers Participation) Act, 1968

Section: 2(c),9

Law: Income Tax Ordinance, 1979

Section: 25(c)

(a) Companies Profits (Workers' Participation) Act (XII of 1968)--- ----Ss. 2(c) & 9---Income Tax Ordinance (XXXI of 1979) [since repealed], S. 25(c)---Workers Profit Participation Fund (WPPF)---Amount transferred by a company to the WPPF---Not liable to tax under section 25(c) of the Income Tax Ordinance, 1979---Transferred amount to the WPPF could not be termed as arising out of a trade/trading rather the same is a statutory liability---Such amount was granted an exemption because a statute, in the present case, Companies Profits (Workers' Participation) Act, 1968, allowed for it---Hence, the amount transferred to the WPPFis nothing but a statutory liability and thus did not attract the provisions of section 25(c) of the Income Tax Ordinance, 1979---Petition was dismissed and leave to appeal was refused. (b) Interpretation of statutes--- ----Special law and general law---Preference---According to the principle of harmonious interpretation, special law would take precedence over the general law. Gulistan Textile Mills Ltd. v. Soneri Bank 2018 CLD 203 ref. JUDGMENT IRFAN SAADAT KHAN, JUSTICE:---.--- Brief facts of the lis before us are that M/s Riaz Bottlers, (now Lotte Akhtar Beverages), ("Respondent") happens to be a private limited company, which derives its income from bottling carbonated soft drinks and non-carbonated drinks. The Respondent's original assessment for the assessment year 2001-2002 was completed under section 62 of the Income Tax Ordinance, 1979 (which now stands repealed but will be referred to as the "Ordinance" herein). This assessment was set aside by the Income Tax Appellate Tribunal, vide Order, dated 01.12.2007, on various issues for de novo consideration. 2. Subsequently, the taxation officer, vide Order, dated 28.06.2008, re-assessed the said issues and made an addition of PKR 7,336,220/- on account of Workers Profit Participation Fund ("WPPF") and interest thereon was added under section 25(c) of the Ordinance, besides other additions. Aggrieved of the re-assessment the Respondent taxpayer preferred an Appeal before Commissioner IT (Appeals), who vide Order, dated 31.07.2008, confirmed the addition made under section 25(c) of the…

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