I.T.AS. NOS. 178/LBI/DB AND 499/LBI/DB OF 1989-90, DECIDED ON 15TH NOVEMBER, 1995. VS I.T.AS. NOS. 178/LBI/DB AND 499/LBI/DB OF 1989-90, DECIDED ON 15TH NOVEMBER, 1995.
1996 P T D (Trib.) 1088
[Income-tax Appellate Tribunal Pakistan]
Before Muhammad Zaman Khan, Judicial Member and Ashfaq Ahmed, Accountant Member
I.T.As. Nos. 178/LBI/DB and 499/LBI/DB of 1989-90, decided on /01/.
th
November, 1995. Income Tax Ordinance (XXXI of 1979)---
----S. 13(1)(d)---Addition---Purchase of property by assessee---Rejection a;; value shown in the registered deed by the Assessing Officer--Validity- --Held registered deed being a public document the price of property mentioned therein possessed an element of sanctity unless it was rebutted through cogent evidence---Where there was no such evidence with the Assessing Officer and he had proceeded to reject the version of the assessee basing his order on conjectures and surmises and such estimated value was not supported by any evidence on the record, Commissioner of Income-tax was right in deleting the addition made under S.13(1)(d) by the Assessing Officer.
1995 PTD (Trib.) 1182 and 1995 PTD (Trib.) 1179 ref
Sartaj Yousuf, D.R. for Appellant.
Asif Mushtaq for Respondent.
Date of hearing: 15th November 1995.
ORDER
MUHAMMAD ZAMAN KHAN (MEMBER). ---Through this single order we propose to dispose of the titled two cross--appeals which have arisen out of one and the same order rendered by the then C.I.T.(A) Faisalabad on 8-8-1989. Originally the assessment order was formulated by the I.T.O. Companies Circle. Faisalabad on 15-6-1989. The relevant assessment year is 1988-89. The assessee is a Director in A.G. Corporation (Pvt.) Ltd., Faisalabad. During the year under review the assessee had derived income from salary and property in the following manner:---
| 1. Salary Income | Rs. 2.04,000 |
| 2.Property Income | Rs. 9,548 |
| Total:- | Rs. 2,13, 548 |
2. The brief facts of the matter are that during the perusal of the wealth statement filed by the assessee for the period ending 30-6-1988 it was found that the assessee had purchased 1/4th share in a plot of land situated in Chak No.213-RB, Faisalabad for a total consideration of Rs.21,000 including the registration expenditure. The I.T.O. found that the price of the plot was grossly misunderstood by the assessee. The I.T.O. called upon the assessee to show cause as to why the price of the plot be not adopted at a valuation ranging between Rs.20,000 to Rs.40,000 per Marla. Ultimately the valuation was determined at Rs.30,000 per Marla. The value of the share of the plot of the assessee was determined accordingly at Rs.1,91,250 and an addition of Rs.1,72,250 was accordingly made in the total income of the assessee under section 19(1)(d) of the Income Tax Ordinance, 1979.
3. The assessee had declared Rs.60,000 as household expenses. These were also found low by the I.T.O. and an addition of Rs.24,000 was also made by the I.T.O. under section 13(1)(e) of Income Tax Ordinance, 1979.
4. A sum of Rs.2,400 was also added under Rule 13(2) of Income Tax Rules, 1982 on the plea that the assessee was using the car of the Company for personal purposes.
5. In the above circumstances, the net income of the assessee was assessed at Rs.4,12,198.
6. On the contrary the plea of the assessee was that the valuation shown in the registered deed was correct. Similarly the household expenses as disclosed by the assessee were also alleged to be correct. The case of the assessee was that the disclosed income at Rs.2,13,548 be accepted.
Aggrieved by the order of the I.T.O. the assessee had filed first appeal whereby all the three additions as described above were contested by the assessee.
8. The C.I.T.(A) vide the impugned order, dated 8-8-1989 had deleted the addition of Rs.1,72,250 for various reasons given in his order. However, the additions of Rs.2,400 and Rs.2,400 as explained above have since maintained by the C. I. T. (A).
9. The revenue has assailed the order, dated 8-8-1989 alleging that there was no justification for the C.I.T.(A) to delete the addition of Rs.1,72,250 which according to the department was quite fair and in line with the other parallel cases regarding the purchase of land.
10. On the other hand the assessee has filed the cross appeal saying that the C.LT.(A) was not justified to uphold the additions made on account of household expenses and perquisites.
11. As both the appeals are inter-linked, as indicated above, they are being disposed of through this consolidated order.
12. We have heard the arguments addressed by the learned representatives of both the parties and have also gone through the orders, which have been rendered in this case by the departmental authorities.
13. The C.I.T.(A) has deleted the addition of Rs.1,72,250 for the reasons that the assessing officer has ignored and violated the provisions of section 13 of Income Tax Ordinance before making the said addition, that the precedent cases relied upon by the I.T.O. in determining the price of Rs.30,000 per Marla were not applicable in the case in hand and that the stated Rule in the Registration Deed could not be rejected by the I.T.O. in the given circumstances of the case. In support of his order the C.I.T.(A) has also relied upon the Notification by virtue of which the Collector concerned had fixed the value of various categories of land and the transactions of the sale of land in the similar circumstances as that of the case of the assessee and it has been found by C.I.T.(A) that the value of the plot purchased by the assessee was quite in line with the value fixed by the Collector of similar land and various other deals, as described in the order of the C. I. T. (A).
14. Be that as it may it has been argued by the learned D.R. that the value of the plot of the assessee was determined by the I.T.O. after providing a reasonable opportunity of being heard and the view point of the assessee was also taken into consideration before the matter was finalized. The perusal of the relevant orders indicates, that the contention of the learned D.R. is not devoid of force. We are, therefore, unable to look eye with the C.I.T.(A) so far as this aspect of the matter is concerned.
15. Regarding the determination of the value of land at the rate of Rs.30.000 per Marla by the I.T.O. we find that the said order was not passed on the basis of cogent and relevant material, The I.T.O. has himself conceded in his order that the plot of the assessee did not adjoin the lands in regard to which reliance was placed for determining the value of the plot of assessee. It is also not clear from the order passed by the I.T.O. that the plot of the assessee and the other so-called similar plots were of the same status and value. On the contrary the C.I.T.(A) has referred to various parallel cases in which the value of those plots was also found in line with the price of the plot of the assessee. The Notification issued by the Collector was also found in consonance with the plea of the assessee, regarding the valuation of the plot of the assessee.
16. In the above circumstances, it cannot be said that the price of the plot disclosed by the assessee was low.
17. Besides the above it has been rightly pointed out by the C.I.T.(A) that the I.T.O. was not competent to reject the valuation shown m the Registered Deed unless he had positive evidence in his possession to controvert the same. The C.I.T.(A) has also referred to certain cases which were decided by the Tribunal and in which it has been held that the Registration Deed being a public document, the price of property mentioned in it possessed an element of sanctity unless it was rebutted through cogent evidence. So far as the present case is concerned it is manifest that there was no such evidence in the custody of the I.T.O. and he has proceeded to disbelieve the version of the assessee basing his order merely on conjectures and surmises. The estimated value as such does not stand supported from any evidence on the record. Besides the authorities mentioned in the order passed by the C.I.T.(A) on the relevants point, learned A.R. of the assessee has also referred to the two latest authorities in 1995 PTD (Trib.) 1182 and 1995 PTD (Trib.) 1179 in which it has also been held that the Tax Authorities cannot throw away a legal document like a Registered Deed on their pure whims and in the absence of any proof regarding the price being higher they are supposed on abide by the Registered Deed and the declared version had to be accepted.
18. In the above circumstances we find that the C.I.T.(A) has rightly deleted the addition of Rs.1,72,250 made under section 13(1)(d) by the I.T.O. The order passed by the C.I.T.(A) in this regard is, therefore, upheld.
19. The I.T:O. had found that the household expenses declared by the assessee at Rs.60,000 per year were not up to the mark in the present cost of living index. The assessee was also found to be residing in the most prestigious locality of Faisalabad city and was also maintaining a high standard of living. In these circumstances an addition of Rs.24,000 in the household expenses of the assessee is just and reasonable and does not call for any interference at our level. Similarly under the head perquisites an amount of Rs.2,400 has also been rightly added towards the total income of the assessee as prescribed under Rule 13(2) of the Income Tax Rules, 1982, because the assessee was using the car for personal purposes though it was being maintained by the Company.
20. As a sequel to the above, we have reached the irresistible conclusion that the order passed by the C.I.T.(A) is unexceptionable. Hence the same is hereby confirmed in toto.
21. As a result thereof both the cross-appeals being devoid of force merit dismissal and the same are accordingly dismissed.
M.B.A./194/Trib Order accordingly