I.T.A. NO. 4744/LB OF 1986-87, DECIDED ON 2ND NOVEMBER, 1994. VS I.T.A. NO. 4744/LB OF 1986-87, DECIDED ON 2ND NOVEMBER, 1994.
1995 P T D (Trib.) 1182
[Income-tax Appellate Tribunal Pakistan]
Before Ch. Irshad Ahmad, Judicial Member and Saleem Asghar Mian, Accountant Member
I.T.A. No. 4744/LB of 1986-87, decided on 02/11/1994.
Income Tax Ordinance (XXXI of 1979)---
----S.13(1)(d)---Addition---Deemed income---Addition under S.13(1)(d), Income Tax Ordinance, 1979 was made by the Assessing Officer on the ground that assessee had understated the consideration paid for the acquisition of property by him---Assessing Officer had not stated whether the assessee's income during the year did or did not justify the acquisition of the property-- Assessee also had not offered reasonable explanation regarding the source to acquire the property---Held, where an acquisition of property was made by registered deed ordinarily the consideration evidenced by the sale-deed should be accepted as the value of the property by the tax authorities unless they could prove that the consideration stated in the deed was too low and the assessee had acquired the property by expending more money---Income Tax Appellate Tribunal, in circumstances, set aside the orders of Tax Authorities relating to addition under S.13(1)(d) .of .the Ordinance with the direction that the Assessing Officer shall redecide the issue whether or not the assessee's income justified the acquisition of the property of the consideration mentioned in the sale-deed including acquisition charges.
Kh. Riaz Hussain for Appellant.
Amjad Malik, D.R. for Respondent.
Date of hearing: 2nd November, 1994.
ORDER
CH. IRSHAD AHMAD (JUDICIAL MEMBER).---The assessee, an individual, derives income from dealings in rubber items. In his return of income filed under the Self-Assessment Scheme for the assessment year 1985 86 the assessee declared his income at Rs.20,000. The return was, however, selected for detailed scrutiny through random ballot. The wealth statement filed by the assessee alongwith the return showed that the assessee had made an investment of Rs.50,000 in the form of acquiring one half share in a shop. The Income Tax Officer, however, was of the view that the value of the share in the shop acquired by the assessee was equal to Rs.81,000 which included incidental charges of acquisition. Accordingly, the I.T.O. made an addition of Rs.81,000 to the income of the assessee treating the value of the share in shop as deemed income under section 13(i)(d) of the Income Tax Ordinance, 1979. The assessee's appeal was also rejected by the AA.C. Through this further appeal the assessee has objected to the order of the tax authorities in respect of estimation of sales, the application of G.P. at the rate of 15% and the addition made under section 13(i)(d) of the Ordinance. However, at the time of arguments the counsel for the assessee pressed only the issue regrading addition under section 13(1)(d) of the Ordinancce.
We have heard Kh. Riaz Hussain, for the assessee, and Mr. Amjad Malik, D.R. for the Department.
The counsel for the assessee contended that the tax authorities were not justified to estimate the value of the assessee's share in the shop at Rs.81,000 because there was no evidence in support of the said findings: On this point we are inclined to agree with the assessee's counsel. Where an acquisition of a property is made by registered deed ordinarily the consideration evidenced by the sale-deed should be accepted as the value of the property by the tax authorities unless they can prove that the consideration shown in the deed was too low and the assessee had acquired the property by expending more money. In our view, therefore, the tax authorities should take the value of the assessee's share' in the shop equal to the amount shown in the registered deed plus acquisition charges come by the assessee, if any. The tax authorities have not equally stated whether the assessee's income during the year did or did not justify the acquisition of the share in .the shop. The assessee too does not seem to have offered reasonable explanation regarding the source to acquire the share in the shop. Accepting the assessee's appeal we set aside the tax authorities orders relating to addition under section 3(1)(d) of the Ordinance with the direction that the I.T.O. shall re-decide issue whether or not the assessee's income justified the acquisition of the share in the shop for the consideration mentioned in the sale-deed including acquisition charges come by the assessee.
M.BA./.115/T Order accordingly.