| Case ID |
166cd9ff-c45b-492b-8949-3963283dd9f1 |
| Body |
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| Case Number |
Reference No. 186 of 1964 |
| Decision Date |
Nov 10, 1970 |
| Hearing Date |
|
| Decision |
The Sindh High Court ruled in favor of the respondent, Messrs Shennihon Steamship Co. LTD., affirming the decision of the Income-tax Appellate Tribunal. The court concluded that the initial and additional depreciation should be allowed under section 10(2)(vi) of the Income-tax Act, 1922, and rule 8(2) of the Income-tax Rules, 1922, for ships registered outside Pakistan. The court emphasized that the interpretation of the relevant provisions should benefit the taxpayer, especially considering the ambiguity in the language regarding the installation and previous use of the ships. The decision reinforced the principle that foreign companies should not be unfairly penalized in tax assessments due to their operational practices outside of Pakistan. |
| Summary |
This case revolves around the taxation of a foreign shipping company, M/s. Shaennihon Steamship Co. Ltd., which was assessed by the Income-tax Department in Pakistan. The primary issue was whether the company was entitled to initial and additional depreciation for ships registered outside of Pakistan. The Income-tax Officer initially denied the depreciation claims, leading to an appeal by the company. The Appellate Assistant Commissioner allowed the claims, which were subsequently upheld by the Income-tax Appellate Tribunal. The case underscores the complexities of international taxation, especially for foreign companies operating in Pakistan. The court's decision highlights the importance of clear legislative language and the need for fair treatment of taxpayers, particularly in light of the ambiguous provisions of the Income-tax Act regarding depreciation allowances. The ruling is significant for foreign entities engaged in shipping and other cross-border activities, emphasizing the necessity for tax laws to adapt to the realities of global business operations. Overall, this case contributes to the evolving understanding of tax liabilities for foreign businesses in Pakistan, establishing precedents for future cases involving similar issues. |
| Court |
Sindh High Court
|
| Entities Involved |
M/s. Shaennihon Steamship Co. Ltd.
|
| Judges |
QADEERUDDIN AHMAD, C.J.,
KHUDA BAKHSH MARRI, J
|
| Lawyers |
|
| Petitioners |
The Commissioner of Income Tax
|
| Respondents |
Messrs Shennihon Steamship Co. LTD.
|
| Citations |
1971 SLD 803,
1971 PTD 429
|
| Other Citations |
Not available
|
| Laws Involved |
Income-tax Act, 1922,
Income-tax Rules, 1922
|
| Sections |
10(2)(vi),
Rule 8(2),
Rule 33
|