Law: Income Tax Ordinance, 1979

Section: 12,2(16)(c),2(30)&2(40)(c),12(5)(a,

(a) Income Tax Ordinance (XXXI of 1979)---Ss. 2(16)(c), 2(30) & 2(40)(c)---Company---Non-resident or resident--­Determination of status ---Company/assessee was registered in U.S.A.--­Branch Office in Pakistan claimed "resident status" being permanent establishment which was rejected by the Assessing Officer---First Appellate Authority found that company was resident with no head office expenses and was qualified for status of company as defined under S.2(16) of the Income Tax Ordinance, 1979---Validity---Permission letter showed that branch office was not a resident company the control and management of affairs of which were not in Pakistan---Expenses of branch office were met by transfer of funds from abroad through normal banking channels---Balance-sheet and P&L Account also showed that it was the head office of the foreign company which financed the branch office---Nothing was on record which suggested that branch office itself was a resident company but it was a body corporate incorporated in U.S.A. and fell within the definition of a company under S.2(16)(c). of the Income Tax Ordinance, 1979 but could not be treated as resident under S.2(40)(c) of the Income Tax Ordinance, 1979 in circumstance. (b) Income Tax Ordinance (XXXI of 1979)--- ----S.12(5)(a)---Income deemed to accrue or arise in Pakistan---Fee for technical services---Fiction of place---Fees paid to non-resident were deemed to accrue or arise in Pakistan under S.12(5)(a) of the Income Tax Ordinance, 1979 if technical services were utilised in a business or profession carried on in Pakistan or for purposes of earning any income from any source in Pakistan---Effect of S.12(5)(a) of the Ordinance was to create fiction of place i.e. declaring an income of a non-resident from a source in Pakistan as income arising in Pakistan. (c) Income Tax Ordinance (XXXI of 1979)-- ----Ss.80-AA, 12(5)(7), 30(2)(b), 22 & 62---C.B.R. Circular No.2(3)IT/2, dated 20-11-1982---Convention between Government of -Pakistan and Government of U.S.A. for Avoidance of Double Taxation, Arts. II(1), III(1) & III(3)---Tax on income of non-resident from fees for technical services--­Assessee/company was registered…

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