Law: Income Tax Act, 1961

Section: 80AA,22&12(5)

Income Tax Ordinance (XXXI of 1979)-----Ss.80-AA, 22 & 12(5) --Fee for technical service---Tax on income of non-resident from fees for technical, a non-resident service ---Assessee was employed as highly skilled personnel, who used sophisticated equipments and carried out physical activities for collection of scientific data and gave the expert advice---Receipts by such assessee were treated as fees for technical services and were taxed under S.62 read with S.80-AA, Income Tax Ordinance, 1979 by charging tax a 15 % , being the final discharge of tax liability---Validity---Technical services could be rendered through advice which could be based on technical information and data collected through technical personnel by using technical equipments and tools---Employment as highly skilled personnel; use of sophisticated equipment for the purpose of collection of data and giving expert advice was nothing but a "technical service" and fees received fell under the definition of "fees for technical service" in terms of the Explanation to S.12(5), Income Tax Ordinance, 1979-,-Such receipts, therefore, were chargeable to tax at the rate specified in S.80-AA, Income Tax Ordinance, 1979. Glaxo Group Limited v. CIT, Karachi 1992 PTD 636; 1998 PTD (Trib.) 291 and 1998 PTD (Trib.) 1264 ref. 1993 PTD 739; I.T.As. Nos. 914/111 of 1991-92, 226/IB of 1993-94; 1133, 1134/IB of 1995-96; 18 and 19/IB of 1994-95 distinguished. ORDER RASHEED AHMED SHEIKH (JUDICIAL MEMBER). ---This appeal at the instance of the assessee-appellant is directed against order, dated 16-10-1997 passed by the CIT(A), Zone-I, Islamabad in respect of the assessment year 1997-98. At the very outset Mr. Abdul Hafeez Khokhar, Advocate, the learned A.R. of the assessee stated that when all the primary facts and the related documents of the case were available before the learned Appeal Commissioner, he should have then decided the issues involved in assessees appeal on merits rather than setting aside the same to the decided de novo. It was accordingly prayed that all the issues involved in assessees appeal be decided on its merits by the Tribunal. Hence, we proceed to decide assessees appeal on merits…

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