1992 PLP 762 (PTD)
COMMISSIONER OF INCOME TAX, CENTRAL ZONE-B, KARACHI Versus Messrs BOOTS CO. (PAKISTAN) LTD., KARACHI
| Citation | 1992 PLP 762 (PTD) |
| Forum / Court | Karachi High Court |
| Bench Members | Mamoon Kazi and Kamal Mansoor Alam, JJ |
| Parties | COMMISSIONER OF INCOME TAX, CENTRAL ZONE-B, KARACHI Versus Messrs BOOTS CO. (PAKISTAN) LTD., KARACHI |
| Primary Law | Income Tax Ordinance (XXXI of 1979) |
Q1: What are the key laws and sections cited in 1992 PLP 762 (PTD)?
This judgment primarily cites: Income Tax Ordinance (XXXI of 1979) as referenced in Pakistani case law index.
Q2: Which judicial bench decided the case 1992 PLP 762 (PTD)?
The case was heard and decided by the Karachi High Court bench comprising: Mamoon Kazi and Kamal Mansoor Alam, JJ.
Q3: What is the official citation format for this judgment on Pakistan Law Portal?
Cite this legal precedent as: 1992 PLP 762 (PTD) (COMMISSIONER OF INCOME TAX, CENTRAL ZONE-B, KARACHI Versus Messrs BOOTS CO. (PAKISTAN) LTD., KARACHI). Read the full summary and cross-referenced laws free on Pakistan Law Portal.
Laws Cited
Representation
- Sirajul Haq for Mansoor Ahmed Khan for Respondent.
- Date of hearing: 18th December, 1991.
Headnotes / Summary
First Sched., Part III
Provision/liability for tax falls within the purview of the expression "income retained for meeting working capital requirements" as used in First Sched., Part III of the Ordinance and is to be excluded from the total income for levy of surcharge. Commissioner of Income Tax v. Pakistan Tobacco Co. Ltd. 1988 PTD 66 fol. Sheikh Haider for Applicant.
Judgment & Decree
MAMOON KAZ1, J.
In this case while disposing of the second appeal the learned Income Tax Appellate Tribunal held that the provision/liability for tax falls within the purview of the expression "income retained for meeting working capital requirements as used in Part III of the First Schedule to the Income Tax Ordinance and hence it is to be excluded from the total income for levy of surcharge. The department was aggrieved and consequently the question, whether the Tribunal was justified in holding the same has been referred to us for determination. It has been pointed out that the question referred to us has already been decided by a Division Bench of this Court in the case of Commissioner of Inc-me Tax v. Pakistan Tobacco Co. Ltd. 1988 PTD
66. The following observations of the Division Bench which appear at para. 14 of the judgment arc reproduced below:
"
14. From the above inferred definition of the words, "working capital", "current liability" and "current assets", it is evident that Macmillan Dictionary of Accounting by R.H. Parker has excluded provisions for taxation and proposed dividends from the ambit of current liabilities. The other books have not referred to the above aspect. 1t may be observed that the exclusion of the above two items may be justified in a case of a new set-up, in which working capital would not require any provision for the taxation and for the proposed dividends as till the time the factory goes into production or a business operates profitably the question of payment of any income-tax or dividend would not arise. The other reason may be that the learned author had in mind only the items which are either in liquid form or are readily liquidable and can be used for earning profit in day to day business. But there seems to be consensus among the learned authors as to the definition of the words "working capital", namely, that is the difference between current assets and current liabilities. In some of the above-cited definitions of the term "current liabilities" the provision for taxation has been included. We are also inclined to hold that the current liabilities will include a liability to pay inter alia advance tax, and, therefore, falls within the ambit of working capital requirement." Since the question has already been answered by a Division Bench of this Court, we answer the question accordingly, that is to say, in the affirmative. M.B.A./C-264/K Reference answered.