MAMOON KAZI, J.---The respondent in this casts declared total income of Rs.1,02,31,657 which was assse ssed at Rs.1,21,69,986 and on tax thereon, which was worked out at Rs.57,68,714, a surcharge of Rs.4,61,686 was levied, Against this levy the respondent filed appeal before the Commissioner of Income-tax (Appeals) Zone-2, Karachi, who deleted the levy of surcharge. The department being aggrieved by this order filed an appeal before the learned Appellate Tribunal which relying on its earlier decision reported as 1988 PTD (Trib.) 155 confirmed the finding of the learned Commissioner of Income-tax (Appeals) which has now resulted in this reference. The following question has been referred by the learned Income-tax Appellate Tribunal for our determination: "Whether on the facts and circumstances of the case, the Appellate Tribunal was justified in holding that provision/liability for tax falls within the purview of the expression income as 'retained for meeting working capital requirements, as used in para. A of Part III of the First Schedule to the - Income-tax Ordinance, 1979 read with section 10 thereof and it is to be excluded from the total income for levy of surcharge."
2. Learned counsel have pointed out that the question has earlier been answered by this Court's judgment reported as Commissioner of Income-tax v. Pakistan Tobacco Company Ltd. And others 1988 PTD 66. In this case the relevant observations were as follows:-- "There cannot be any cavil to the legal proposition propounded in the above two cited cases. The legal position is very obvious, namely that accounting year is different from assessment year. The law applicable to a particular assessment year will be the law which is in force in that year and not the law which was in force during the accounting year unless otherwise stated or implied. As a matter of fact, contrary to this was not canvassed by the learned counsel for the respondents- assessee. It was not contended that the above-substituted proviso pertaining to surcharge which was effective from assessm ent year 1981-82 was applicable to the present cases which pertain to the assessm ent years prior to the above year but what was contended and referred to hereinabove is that the factum that the legislature though it fit to provide definition of the words `retained income' in explanation (a) and to exclude tax and super-tax payable, indicates that law prior to it did include the amount of tax and super-tax payable within the ambit of the definition of 'retained income' which submission is supported by the above Supreme Court case.
For the aforesaid reasons, our answer to the question referred hereinabove in para. 1 is that the Tribunal was justified in holding that income tax liability payable for relevant assessment year could be included for purposes of working out 'retained income' for levy of surcharge."
3. As we find ourselves in complete agreement with the conclusions arrived at by. The learned Division Bench we answer the reference accordingly for the: same reason as stated in the said judgment.