Foreign currency account

2013 PTD 185 PESHAWAR-HIGH-COURT Judicial Precedent

S.16(4) & Second Sched. Cl. (8)Protection of Economic Reforms Act (XII of 1992), S.5Foreign currency accountImmunity against wealth taxScopeForeign currency account maintained by assessee with a bank located in a foreign country

Non-disclosure of such account and amount credited therein by assessee in wealth tax return for relevant assessment year

Order of taxation of such amount passed by authority upheld by Appellate Authority and Appellate Tribunal

Assessee's plea that such account for being outside of Pakistan was immune from probe and exempt from levy of income tax and wealth tax

Validity

Provision of S. 5(1) and (2) of Protection of Economic Reforms Act, 1992 had an overriding effect and must be read together and not independently

According to S. 5(1) and (2) of Protection of Economic Reforms Act, 1992, foreign currency account maintained only in Pakistan by a citizen of Pakistan would be immune from levy of income tax and wealth tax

Agreement for Avoidance of Double Taxation between Government of Pakistan and Federal Council of foreign country in question dilated upon tax on income and not on assets/wealth

Provision of S.4 of Protection of Economic Reforms Act, 1992 related to free movement of foreign currency and not to taxation of deposits in foreign currency account

Where an asset/wealth was not specifically exempted from declaration by any law, but was required to be declared by Wealth Tax Act, 1963 same would be taxable if found taxable

High Court dismissed appeal in circumstances.