| Case ID |
02c110f2-efbd-4cbe-b05e-9e565d0c72ab |
| Body |
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| Case Number |
I.TA. No. 1154(1-B)/1986-87 |
| Decision Date |
May 15, 1992 |
| Hearing Date |
Feb 25, 1992 |
| Decision |
The appeal of the non-resident company incorporated in France was rejected. The Tribunal held that the income declared was taxable under Article XI (1) of the Convention for the Avoidance of Double Taxation between Pakistan and France, as the services rendered were classified as professional rather than commercial. The Tribunal pointed out that the appellant's claim for exemption under Article III was unfounded due to the nature of the services performed and the lack of a permanent establishment in Pakistan. The decision emphasized that professional services are distinct from commercial profits, and despite the appellant's arguments regarding the nature of their operations, the findings of the Income Tax Officer were upheld. |
| Summary |
The case revolves around the appeal of a non-resident company incorporated in France regarding the taxation of income from services provided to oil drilling firms in Pakistan. The main legal issue was whether the income could be exempted under the Convention for the Avoidance of Double Taxation between Pakistan and France. The Tribunal found that the income derived from the professional services rendered by the appellant was taxable under Article XI (1) of the Convention, which does not require a permanent establishment in Pakistan for taxation of professional services. This case highlights the importance of understanding the distinctions between commercial profits and professional services in tax law. The decision reinforced the interpretation of tax treaties and the obligations of foreign entities operating in Pakistan, thus contributing to the discourse on international taxation and compliance. Keywords include 'taxation', 'professional services', 'double taxation', 'international tax law', 'foreign company taxation', which are trending topics in legal and financial discussions. |
| Court |
Appellate Tribunal Inland Revenue
|
| Entities Involved |
Pirkoh Gas Company Ltd.,
Flopetrol International
|
| Judges |
NASIM SABIR SYED (ACCOUNTANT MEMBER),
CH. IRSHAD AHMAD (JUDICIAL MEMBER)
|
| Lawyers |
Khalid Majid, FCA for Appellant,
Noor Muhammad, DR for Respondent
|
| Petitioners |
Not available
|
| Respondents |
Not available
|
| Citations |
1993 SLD 9,
1993 PTD 12,
(1992) 66 TAX 129
|
| Other Citations |
Civil Reference No. 26 of 1972,
CIT, Karachi v. Abbott Finance Co. (SARL)
|
| Laws Involved |
Income Tax Ordinance, 1979
|
| Sections |
132(1)(c)
|