Law: Income Tax Ordinance, 2001

Section: 7,124,143(2)

Income Tax Ordinance (XLIX of 2001)--- ----Ss.7, 124 & 143(2)---S.R.O. No.231(I)/59 dated 4-6-1959---Agreement for avoidance of double taxation between Pakistan and Belgium, Art.8---Vienna Convention of the Law of Treaties---Tax on shipping and air transport income of a non-resident person---Taxpayer company claimed "exemption" from tax on the declared receipts derived from Container Service Charges, Terminal Handling Charges and Container Detention Charges under the provisions of Art. 8 Para 3 of the Agreement for avoidance of Double Taxation entered into between Pakistan and Belgium without any tax liability in respect of collection on account of container service Charges, Terminal Handling Charges and Container Detention Charges---Such receipts were held subject to taxation @ 8% under S.7 of the Income Tax Ordinance, 2001 by the Taxation Officer---Validity---Tax department entered in a MOU dated 26-5-1997 with the Shipping Agents Association wherein it was resolved that if the ancillary income was not covered by bilateral treaty, it shall be taxed in terms of S.7 of the Income Tax Ordinance, 2001 at the specified rate of 8% of gross receipts---Said MOU was being implemented by the contracting parties without any controversy and the taxpayer had not repudiated the other existing benefits from the accepted interpretation of double taxation treaties---No substance was found in the appeals of the taxpayer and these were accordingly rejected by the Appellate Tribunal. I.T.A. No.1236/KB of 2006; I.T.As. Nos.305, 208, 311 etc./KB of 2009; I.T.As. Nos. 85, 87, 91, 94, 131 to 133, 370 to 382, 945, 948 and 951/KB of 2009 and 2010; 1966 PTD 664; PLD 2008 SC 446 = 2008 PTD 1157 and 2004 PTD (Trib.) 2326 ref. ORDER By this single order we intend to dispose of these fourteen appeals, filed by the appellant/taxpayer against the combined impugned order passed by the learned CIR(A) dated 26-8-2013 on the following common grounds:-- "(2) The learned Commissioner Inland Revenue Appeals (Zone-II) erred in misinterpreting the minutes of Memorandum of Understanding agreed upon between the Pakistan Ship Agents' Association and the Tax Administration. (3) The learned…

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