| Case ID |
1a0a71ee-f236-4d6f-964f-2f5c8d157f1c |
| Body |
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| Case Number |
Civil Petition No.553 of 2011 |
| Decision Date |
Jan 24, 2012 |
| Hearing Date |
|
| Decision |
The Supreme Court of Pakistan dismissed the petition for leave to appeal, affirming the judgment of the High Court of Sindh, which had dismissed the Reference application filed by the petitioner. The Court held that profits earned by non-resident shipping carriers from freight charges for cargo brought to Pakistan are taxable under the Income Tax Ordinance, 2001. The Court reasoned that the amounts received by carriers are derived from sources within Pakistan, as payments for freight were made by Pakistani buyers. The interpretation of the Pak-Danish Double Taxation Agreement did not negate Pakistan's taxing rights in this context. The Court emphasized that any ambiguity in interpreting the agreement should favor Pakistan's taxing authority. |
| Summary |
The case of A.P. Moller through Mask Pakistan (Pvt.) Ltd. v. Commissioner of Income Tax, Zone-I, Karachi revolves around the taxability of profits earned by non-resident shipping carriers for freight charges related to cargo delivered to Pakistan. The Supreme Court of Pakistan, in its decision dated January 24, 2012, upheld that such profits are taxable under the Income Tax Ordinance, 2001. The Court clarified that the income is sourced from within Pakistan, as the payments were made by residents for goods sold on an FOB basis. The ruling underscored the importance of interpreting the Pak-Danish Double Taxation Agreement, particularly in cases where two reasonable interpretations exist, favoring Pakistan's right to tax. This case highlights critical aspects of international taxation, double taxation agreements, and the interpretation of income tax laws, making it a significant reference point for future cases involving similar tax implications. |
| Court |
Supreme Court of Pakistan
|
| Entities Involved |
A.P. Moller,
Mask Pakistan (Pvt.) Ltd.,
Commissioner of Income Tax, Zone-I, Karachi
|
| Judges |
Ejaz Afzal Khan,
Ijaz Ahmed Chaudhry
|
| Lawyers |
Dr. Ikram ul Haq
|
| Petitioners |
A.P. Moller through Mask Pakistan (Pvt.) Ltd.
|
| Respondents |
another,
Commissioner of Income Tax, Zone-I, Karachi
|
| Citations |
2012 SLD 46,
2012 PTD 683,
(2012) 105 TAX 213,
2012 PTR 1,
2012 SCMR 557
|
| Other Citations |
Not available
|
| Laws Involved |
Income Tax Ordinance, 2001
|
| Sections |
7(1)(b),
101,
107,
239(10)
|