Law:

Section:

Finance Act (XXX of 1977)---Part III [as amended by Finance (Amendment) Ordinance. (II of 1978)] --Company--Surcharge--Retained income--Working capital--While calculating surcharge, tax payable (both income-tax and super-tax) has to be subtracted--Principle that payment of tax would amount to meeting the requirement of working capital is not to be lost sight of, while levying surcharge as prescribed by. Ordinance II of 1978-¬Assessing Officer, therefore, has to exclude tax payable from the total income while levying the surcharge. ORDER A.A. ZUBERI (ACCOUNTANT MEMBER).--This Appeal by the Department impugns learned Appellate Assistant Commissioner-Range, Order No.7771/78/619, dated 15-10-1978 relating to the assessment year 1977-78. The order was passed under Section 35 of the Income Tax Act to rectify certain mistake which had crept in the learned Appellate Assistant Commissioners order passed on 10-10-1978 vide Appeal No.7771/78/620 on 10-10-1978. 2. The discussion before us revealed-that the assessing officer had levied surcharge under section 4 of the Act for which purpose retained income was worked out at Rs.20,88,355 for exclusion from the total income of Rs.1,00,37,893. To fix the quantum, of retained earnings the assessing officer had excluded Dividends (Rs.34,64,000) Tax payable (Rs.44,85,537). The assessee pleaded before the learned Appellate Assistant Commissioner that, while calculating surcharge, Tax payable (both Income-tax and super-tax) had to be subtracted. By this method retained earnings were to be Rs.65,73,893 (not Rs.20,88,356 as taken by the assessing officer). The learned Appellate Assistant Commissioner accepted this plea which in effect meant that the amount subjected to surcharge was held to be Rs.34,64,000 and not Rs.79,49,537. 3. The Department now feels that the exclusion was wrongly made granted because tax payable could not be called as retained earnings. The learned Authorised representative for the Assessee, on his turn submitted that Part III of the Finance Ordinance 1977 (As amended vide Ordinance No. II of 1978) prescribed Surcharge at 10% of "the Income Tax and super-tax on total income as reduced by so much of the income as…

Deprecated: trim(): Passing null to parameter #1 ($string) of type string is deprecated in /home/digixyei/sldsystempk.com/view/master-layout/view_case.php on line 492