Law: Income Tax Ordinance, 1979

Section: 10First SchedulePartIII

Law: Finance Act, 1977

Section: 4,FirstSchedule

(a) Income Tax Ordinance (XXX1 of 1979)-----S.10 & First Schedule Part III, Para A; Finance Act (XXX of 1977), S.4 & First Schedule [as amended by Ordinance II of 1978]---Levy of surcharge--¬Expression "income as has been retained for meeting working capital requirements"---Connotation---"Current liabilities," meaning---Whether provision/liability for tax is an income as has been retained for meeting working capital requirements---Held, the amount of provision/liability for tax fell within the purview of expression "income as has been retained for meeting working capital requirements" and as such was to be excluded from total income for levy of surcharge. Commissioner of Income Tax v. The Pakistan Tobacco Co. Ltd. 1988 PTD 66 fol. (b) Income Tax--- ----"Working capital"---Working capital is the difference between current assets and current liabilities. Commissioner of Income Tax v. The Pakistan Tobacco Co. Ltd. 1988 PTD 66 ref. (c) Income Tax--- ---'Current liabilities"---Expression "current liabilities" will include a liability to pay, inter alia, advance tax, and provisions for taxation. Commissioner of Income Tax v. The Pakistan Tobacco Co. Ltd. 1988 PTD 66 ref. JUDGMENT MAMOON KAZI, J.---The Income Tax Appellate Tribunal while disposing of a second appeal held that the amount of provision/liability for tax falls within the purview of expression "income as has been retained for meeting working capital requirement" as used in Part III of the Schedule to Finance Act, 1977 as amended and hence it was to be excluded from total income for levy of surcharge. The department was, however, aggrieved by the above findings and therefore following questions have been referred to this Court for determination: --- Question of Law for 1977-78. "Whether on the facts and circumstances of the case, the Appellate Tribunal was justified in holding that the amount of provision/liability for tax falls within the purview of expression "income as has been retained for meeting working capital requirement" as used in Part III of the first Schedule to Finance Act, 1977, as amended by substituting through the Ordinance 11 of 1978 and section 4 of the Finance Act and hence it…

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