1. MUHAMMAD HUSSAIN ADIL KHATRI, J.---The assessee/respondent is a non-resident Association of persons. During the assessm ent year 1973-74 they received an amount of Rs.54,499 towards technical fee and royalties from M/s. Abbot Laboratories (Pakistan) Limited, a Pakistani Company for the use of some patents formulas. The assessee claimed exemption from payment of tax on the entire amount received by it from the above-named Pakistani Company under an agreement dated 1st December, 1960 by virtue of Article VII or, alternatively, Article III of the Agreement for Avoidance of Double Taxation between Pakistan and Switzerland, or under section 43(3) of the Income Tax Act, 1922. The Income Tax Officer, however, rejected assessee's claim on the ground that the technical fee earned by the company on account of performance of specific services, was not covered by any provision of the exemption clause of the agreement. Similar treatment was given to the assessee in respect of the similar claim for the years 1963-64 to 1967-68.
2. Against the aforesaid assessm ent the assessee filed a direct appeal to the Appellate Tribunal. The Tribunal cancelled the assessm ent.
3. The Commissioner of Income-tax therefore filed an application under section 66(1) before the Tribunal for referring the following questions for the opinion of this Court and accordingly the following questions have been referred which arise out of the order passed:--
(1) Whether, on the facts and in the circumstances of the case, the Appellate Tribunal was justified in holding that technical services fee received by the assessee was exempt from tax?
(2) Whether on the facts and in the circumstances of the case, the Appellate Tribunal was justified in annulling the assessm ent for the year 1973-74?
4. It may be pointed out that the similar treatment was given to the assessee during the years 1963- 64 to 1967-68. The similar questions that arose from the decisions of the Appellate Tribunal pertaining to the aforesaid years, were referred to this Court. The references were registered as I.T.C. Nos.52 to 54 and 58 of 1972 which were decided by judgment dated 1-12-1981 holding as under:-- "It is therefore clear that Article III of the agreement squarely applies and the income derived from the fee has been rightly exempted."
5. Similar questions arose in the assessment years 1971-72 and 1972-73 which were referred to this Court and the references were registered as I.T.Rs. Nos. 296 and 301 of 1974 and the questions were similarly answered in affirmative. In several other cases including the one reported in 1982 PTD 31 Income-tax Commissioner v. M/s. Abbot Finance Co. The following observation was made:-- "In terms of Article. VII(2) of the Agreement for Avoidance of Double Taxation entered into between the Government of Pakistan and U.K. The assessee is entitled to tax exemption in respect of y ' technical fee."
6. We are in respectful agreement with the aforesaid earlier judgment and answer the question No. 1 in affirmative. In view of the finding give on question No. 1 the question No.2 is redundant and needs no answer.