| Case ID |
7f82b667-7d22-47c1-8531-54ec30484f0f |
| Body |
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| Case Number |
I.T.R. No. 78 of 1987 |
| Decision Date |
Dec 18, 1991 |
| Hearing Date |
Dec 18, 1991 |
| Decision |
In this case, the Sindh High Court upheld the decision of the Income Tax Appellate Tribunal, affirming that the provision/liability for tax is to be excluded from the total income for the levy of surcharge. The court highlighted that the prior decision in Commissioner of Income Tax v. Pakistan Tobacco Co. Ltd. set a precedent for this interpretation, clarifying the terms 'working capital', 'current liability', and 'current assets'. The court noted that provisions for taxation should not be included in current liabilities, thereby reinforcing the Tribunal's ruling. |
| Summary |
This case revolves around the interpretation of the Income Tax Ordinance, 1979, particularly concerning the treatment of tax provisions in financial statements. The Sindh High Court was asked to determine whether tax provisions should be considered part of the total income for the purpose of surcharge calculations. The judgment emphasized that such provisions are not current liabilities and should be excluded from total income. This case is significant as it clarifies the definitions of working capital and current liabilities, providing guidance for financial reporting and tax assessments. It also reinforces the importance of precedent in legal interpretations and the consistency required in tax law applications. The ruling could impact how businesses report income and prepare for tax liabilities, ensuring compliance with the Income Tax Ordinance. |
| Court |
Sindh High Court
|
| Entities Involved |
Not available
|
| Judges |
MAMOON KAZI,
KAMAL MANSOOR ALAM
|
| Lawyers |
Sheikh Haider,
Sirajul Haq,
Mahmood A. Hashmi
|
| Petitioners |
COMMISSIONER OF INCOME TAX, CENTRAL ZONE B, KARACHI
|
| Respondents |
Messrs ALLWIN ENGINEERING INDUSTRIES LTD., KARACHI
|
| Citations |
1992 SLD 119 = 1992 PTD 768
|
| Other Citations |
Commissioner of Income Tax v. Pakistan Tobacco Co. Ltd. 1988 PTD 66
|
| Laws Involved |
Income Tax Ordinance, 1979
|
| Sections |
FirstSched
|