Law: Income Tax Ordinance, 2001

Section: 122,122(5A),148(7),153(5)(iii)

Income Tax Ordinance (XLIX of 2001)----Ss. 122(5A), 148(7) & 153(5)(iii)---Amendment of assessment---Imports---Turnkey contracts---Contractual receipts---Adjustment of tax deducted at import stage---Taxes paid at the time of import and amount received against contractual receipts were treated as final tax liability on ground that S.148(7) of the Income Tax Ordinance, 2001 clarified the position of finality of tax collection at import stage by commercial importer and adjustable in cases where raw material had imported by industrial undertaking for their own consumption; that assessee company was engaged in number of turnkey contracts the items imported constituted part of company's turnkey contractual obligation; that supply of goods and execution of contract were separately described in S.153 of the Income Tax Ordinance, 2001; and that tax-deductible against contractual receipts was discharge of final tax liability---Taxpayer contended that S.153(5)(iii) of the Income Tax Ordinance, 2001 provided that goods should sold in the same condition as they were when imported; that the imported goods were not sold in the state in which they were imported and became part of the overall turnkey contracts, whereby they were consumed/used in furtherance of the contracts reached between the company and its customers; that goods imported for consumption/use in furtherance of contractual obligations could not be termed as commercial imports; that tax suffered at source from the receipts against contract was final discharge of tax liability; and that contracts executed were chargeable to tax under S.153 of the Income Tax Ordinance, 2001 and the incident of taxation would be at the stage of receipts in accordance with the terms of the respective contracts and not under S.148 of the Income Tax Ordinance, 2001 when items/spare parts etc. required for such contracts were imported---Validity---Assessee company had various contracts and raw material was imported for usage in these contracts; it could not be taxed twice, one, at the time of import stage and again at the stage of fulfilling contractual obligation---Full and final discharge of tax liability was to be applied at the…

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