| Case ID |
1658cf20-5bf0-434b-8f09-c87453998368 |
| Body |
View case body. Login to View |
| Case Number |
I.T.As. Nos. 1472/KB to 1475/KB of 2004, 348/KB an |
| Decision Date |
May 14, 2008 |
| Hearing Date |
|
| Decision |
The Income Tax Appellate Tribunal upheld the decision of the Assessing Officer, determining that the amounts received by the appellant, Messrs Marriott Worldwide Corporation, were indeed taxable as fees for technical services under the Income Tax Ordinance, 1979. The Tribunal found that the reimbursement of marketing and reservation costs was not exempt under the Pak-US tax treaty as claimed by the appellant. The agreement between the parties indicated that the payments were based on a fixed percentage of gross room revenue, which the Tribunal interpreted as falling within the definition of fees for technical services. The appellant failed to provide sufficient evidence to substantiate claims of actual incurred expenses, leading to the conclusion that the amounts were taxable. The decision was based on established case law and the terms of the agreement between the parties, confirming the Assessing Officer's authority to tax the reimbursements as such. |
| Summary |
In the case of Messrs Marriott Worldwide Corporation vs. Taxation Officer, the Income Tax Appellate Tribunal adjudicated on the taxability of reimbursements received by the appellant for marketing and reservation costs. The Tribunal affirmed the Assessing Officer's position that these reimbursements constituted fees for technical services, thus subject to taxation under the Income Tax Ordinance, 1979. The decision hinged on the interpretation of the agreement between Marriott Worldwide Corporation and Hashwani Hotels, which indicated that the reimbursement was based on a percentage of gross room revenues. The Tribunal highlighted the lack of evidence from the appellant to substantiate claims of actual expenses incurred, thereby confirming the taxability of the amounts received. This case underscores the importance of clear documentation and compliance with tax regulations, particularly in cross-border transactions covered by tax treaties. Keywords include 'Income Tax Appellate Tribunal', 'taxable fees for technical services', 'Pak-US tax treaty', 'reimbursement of costs', and 'Income Tax Ordinance, 1979'. |
| Court |
Income Tax Appellate Tribunal
|
| Entities Involved |
Not available
|
| Judges |
Khawaja Farooq Saeed,
Jawaid Masood Tahir Bhatti,
Shahid Azam Khan
|
| Lawyers |
Irfan Saadat Khan,
Arshad Siraj,
Basharat Qureshi
|
| Petitioners |
Messrs MARRIOT WORLDWIDE CORPORATION, KARACHI
|
| Respondents |
TAXATION OFFICER, CIRCLE C-8, COMPANIES-I, KARACHI
|
| Citations |
2011 SLD 18,
(2011) 103 TAX 253,
2011 PTD 508
|
| Other Citations |
2007 PTD (Trib.) 1550,
1979 PTD (Trib.) 44,
1999 PTD (Trib.) 3362,
142 ITR 493,
237 ITR 190,
(2004) 91 ITR 133,
202 ITR 1014,
1983 PTD 300,
185 ITR 70,
138 ITR 326,
49 ITR 137,
41 ITR 615,
160 ITR 243,
178 ITR 496,
135 ITR 522,
156 ITR 275,
177 ITR 299,
1999 PTD 4144,
1994 SCMR 222 = 1994 PTD 174,
1996 PTD (Trib.) 100
|
| Laws Involved |
Income Tax Ordinance, 1979
|
| Sections |
12,
12(5),
55,
62,
80,
143,
143B,
80AA
|