Law: Income Tax Ordinance, 2001

Section: 7(1)(b),101,107(2),239(10)

Income Tax Ordinance (XLIX of 2001)---Ss. 7(1)(b), 101, 107(2) & 239(10)---Profits earned by non-resident shipping carrier on in-bound cargo on account of freight received in Pakistan---Taxability of such profits as earned from sources within Pakistan---Scope---Pak-Danish Double Taxation Agreement (DTA) did not contain express renunciation of taxing right by Pakistan in relation of profits earned there from ships operated in international traffic---In case of possibility of two reasonable interpretations of DTA or doubt or ambiguity in its interpretation especially in relation to expression "profits derived from sources within the Contracting State" as used therein, same would be resolved in favour of Pakistan having taxing right---"Sources State" would be regarded such State in which payment was made and would be entitled to tax such payments---Carrier would be entitled to freight charges only if cargo was actually carried to port of destination---Port of destination in the present case was a Port of Pakistan---Both terminus of event by which carrier earned income i.e. carriage of goods and actual payment, were within Pakistan---Payment in the present case was made by a Pakistan buyer, thus, same being profits derived by such carrier from sources within Pakistan could be reasonably regarded as within taxing right of Pakistan---Principles. THIS ORDER PASSED BY: ------- EJAZ AFZAL KHAN, JUSTICE------------- This petition for leave to appeal has arisen out of the judgment dated 27-1-2011 of the High Court of Sindh whereby the learned Judge of the High Court in his chambers dismissed the Reference application filed by the petitioner. 2. The facts leading to the institution of the present petition as described in paragraph No.3 of the impugned judgment are reproduced herein below:-- "(3) The relevant facts needed to answer these Reference Applications can be started shortly and without specific reference to any particular case. In all cases, cargo was carried to Pakistan on ships operated by non-resident shipping companies or charterers (hereinafter referred to as the "carriers"). The cargo consisted of goods sold to Pakistani buyers by foreign sellers on FOB…

Deprecated: trim(): Passing null to parameter #1 ($string) of type string is deprecated in /home/digixyei/sldsystempk.com/view/master-layout/view_case.php on line 492