W.T.A. NO.622/1_13 OF 1995 VS W.T.A. NO.622/1_13 OF 1995, 1997 PTD-INCOME-TAX-APPELLATE-TRIBUNAL-PAKISTAN 135 (1996)

(a) Wealth Tax Rules, 1963---

----R. 8(3), first proviso [as amended by S.R.O. No. 534(1)/94, dated 9-6-1994]---C.B.R. Circular No. 7 of 1994, dated 10-7-1994---C.B.R. Circular No. II of 1994, dated 17-7-1994---Object and interpretation of R.8(3), first proviso, Wealth Tax Rules, 1963 (as amended) and C.B.R. Circular No.7 of 1994 and C.B.R. Circular No. 11 of 1994---Valuation of lands and buildings---Principles---Assessing Officer is not possessed with authority to estimate the properties in question merely on the basis of or by referring to the rates notified by the District Collector under S.27-A of the Stamp Act, 1899, when the assessment was not made in conformity with R.8(3), Wealth Tax Rules, 1963 and no reasons for deviation therefrom were given by the Assessing Officer, Tribunal issued appropriate directions accordingly.

The assessing officer is not at all possessed with any authority to estimate the properties in question merely on the basis of or by referring to the rates notified by the District Collector under section 27-A of the Stamp Act, 1899, first proviso to Rule 8(3) of the Wealth Tax Rules substituted on June 9, 1994 did not materially change or affect the mode of computation of value of lands and buildings excluding agricultural land. The proviso so added only provided that where a property was an open plot of land, the Deputy Commissioner with prior approval of the Commissioner could determine the value at a sum higher than the value specified by the Collector of District for the purpose of collection or charging of stamp duty under the Stamp Act, 1899.

C.B.R. Circular No.7 of 1994 dated July 10, 1994 therefore is totally misconceived when it directs the assessing officers that in cases of open plots the value "shall have" to be estimated on the basis of rates specified by the Collectors of Districts for charging of stamp duty. The direction that any deviation from this will need prior approval of the Commissioner is all the more misdirected and inappropriate. The authority of the C.B.R. to frame rules and then to affect changes therein as empowered under section 46 of the Wealth Tax Act, 1963 is not denied. However, it cannot misconstrue any provision and the rule made or changed by itself. Nor it can enlarge or restrict the scope of properly notified Rule in the guise of an interpretation, explanation or elaboration. The introduction of the aforesaid proviso under Rule 8(3) in 1994 did not in any way change the criterion set forth in the main provisions of Rule 8(3). The first proviso to Rule 8(3) substituted on June 9, 1994 only placed a restriction on the powers of the assessing officers in the two cases enumerated hereunder. First where they intended to adopt valuation of a property at a sum higher than ten times of the GALV of a property and, second in cases of open plots of land when they wished to fix the valuation at a sum higher than the value specified by a District Collector under the said provisions of the Stamp Act, 1899. The proviso does not by itself prescribe a criterion, standard or yardstick for valuation of a property. This proviso was further enlarged on August, 28, 1994 when the requirement of prior approval of Commissioner in the given condition was done away with in respect of open plots purchased through open auction, offers or invitation of bids. S.R.O. 534(1)/94 dated June 9, 1994 also substituted the third or last proviso to Rule 8(3) to read "provided that the Deputy Commissioner shall not, without the prior approval of the Inspecting Additional Commissioner, estimate the gross annual rental value at a sum higher than the rent paid or payable by the tenant. From either of the two substitutions made on June 9, 1994, one cannot find any authority either for the C.B.R. to direct or an assessing officer to accept the rates notified by the District Collector as a gospel truth. The third or last proviso as substituted has re-affirmed the existing practice to evaluate tenantable properties on the basis of GALV restricting further the jurisdiction of an assessing officer to seek permission of his controlling officer if the GALV is to be estimated at a sum higher than the rent paid or payable by the tenant.

The C.B.R. Circular 7 of 1994 dated July 10, 1994 is not only partly contradictory but also contains legal and factual mistake when it enjoins upon the assessing officers to take the value of open plots in accordance with the value determined by the District Collectors for the purpose of stamp duty. Through this Circular letter an attempt has been made to circumvent and to change for the benefit of the Revenue the existing provisions and the Rules made from time to time by the C.B.R. itself.

First proviso to Rule 8(3) of Wealth Tax Rules, 1963 was changed/substituted on June 9, 1994 only to provide for and to remove the uncertainty which existed in respect of the method of evaluation or calculation of GALV of properties which were normally not tenantable, e.g. open plots of land. Particularly those situated in approved or Government? sponsored Housing Scheme which prohibit use of plots for any other purpose except for raising of construction, residential or commercial. Through the proviso untenantable plots and properties have also been made subject to a criteria for evaluation in respect of which estimation of GALV appeared inapplicable or inappropriate. The proviso is clearer than crystal that an assessing officer in respect of open plots may adopt methods other than estimation of GALV and in this connection he can also take into account the rates notified by District Collector under the Stamp Act. The jurisdiction of the assessing officers here again is subject to the condition that they will not, except with the prior approval of the Commissioner, evaluate a plot at a rate higher than the one fixed by the District Collector for levy of stamp duty. To say that even in cases of open plots an assessing officer will mechanically adopt those rates is totally incorrect and a travesty of the sense and language of the proviso. Even if for a while the authority and the manner in which the C.B.R. has exercised its powers by issuing the guidelines for the assessing officer accepted, the way the Assessing Officer acted in the case before us and the first Appellate Authority confirmed the assessment order cannot be condoned. Both of these Circular letters repeatedly say that it is only the market value of "open plots" which shall be taken equal to the value specified by the District Collectors for the purpose of stamp duty. These letters also agree that market value of houses and commercial buildings which have been let out shall be determined at 10 times of the GALV of such properties. Both of these letters, suffered from patent illegality when these modified the plain wording of the first proviso to Rule 8(3) by saying that value of open plots shall invariably be the value determined by the District Collectors under the Stamp Act. Also Circular Letter No. 11 of 1994 converts the rule into exception when it provides that if determination of value on the basis of rates notified by the Collector is not possible only then the valuation shall be computed on the basis of GALV. Further that properties let out shall be valued on the basis of GALV and those never let on rent shall be valued on the basis of rates notified by the District Collectors. Here an unnecessary distinction between the properties previously rented out and those which were never rented out or were under self-occupation has been created. The segregation operates against the basic principle in such cases. That GALV of a property is only a national value. The actual rent being fetched by a property is only one of the considerations to be kept in mind while determining the GALV of a property. The definition of this term as contained in explanation to Rule 8(3) only confirms the principle.

C.B.R. Circular No. 11 of 1994 as well as Circular No.7 of 1994 were apparently issued to guide the assessing officer on the "changes" brought in the valuation regime after re-incarnation of the first proviso in June, 1994. The reasons that prompted issuance of two lengthy circular letters in quick succession, No.7 on July 10, 1994 and No. 11 on 17th July, 1994 to explain the said proviso must be mystical as the connection between the proviso and the anecdotes in the Circular Letters is visibly missing. If the idea was to clear the confusion prevailing in wealth tax valuation regime, the results are exactly the opposite of what was desired to achieve. The proviso in fact simply lays down that where an assessing officer would venture to estimate the value of an open plot at a sum higher than the value specified by the District Collector or ten times of the GALV in cases of other immovable properties, he shall seek permission of his controlling officer, the Commissioner. Nothing could be simpler and straight.

The assessment in the present case had been framed in a casual manner and betrayed lack of application of mind. It was totally mechanical. The returned versions in respect of various properties had not even been mentioned nor any basis had been given for their substitution with those determined by the assessing officer. Mere reference to the rates fixed by District Administration does not mean anything. The method adopted by the assessing officer was neither in conformity with Rule 8(3) of the Wealth Tax Rules, 1963 nor in consonance with the decisions made by this Tribunal from time to time. The assessing officer himself having adopted the valuation on GALV basis in respect of the first property on income-tax side, .he could not deviate from the same in absence of any justifiable reason. At any rate since no open plot was declared in the net wealth returned by the assessee, the directions and guidelines issued under the said two Circular Letters were not relevant. Since no reason had been brought home to deviate from the GALV adopted on income-tax side, the Tribunal issued directions that the valuation shall be determined keeping in view the provisions of said Rule 8(3) as also the history of the case if these properties existed `with the assessee in the previous year as well.

(b) Central Board of Revenue Circulars---

---- Interpretation of provision of fiscal statute by C.B.R. can be accepted if not in conflict with principles of interpretation of statutes.

1986 PTD (Trib.) 828 ref.

(c) Interpretation of statutes---

---- Rules framed under the Act of Parliament have the same force.

(d) C.B.R. Circular---

---- Central Board of Revenue has no power to issue circular which could override, modify, or in effect amend the provisions of an Act.

1994 PTD (Trib.) 1288; (1995) 71 Tax 225 (Trib.); Kerala Financial Corporation v. CIT 1995 PTD 1212 = 210 ITR 129 and Central Insurance Company and others v. C.B.R., Islamabad etc. 1993 SCMR 1232 = 1993 PTD 766 ref.

Ch. Bashir Ahmad for Appellant.

Mubeen Malik, D.R. for Respondent

Date of hearing: 10th April, 1,996.

ORDER

An individual returned his net wealth at Rs.9,92,500 for the assessment year 1994-95. The immovable properties included in the net wealth being Hashmi Market, Anarkali Bazar Faisalabad, a shop at Afghan Abad, Faisalabad, a double-storeyed house at Gulberg, Faisalabad, a shop at Rail Bazar and a house in Anarkali Bazar, Faisalabad. The various valuations declared in respect of these properties are not indicated in the assessment order. The first property Hashmi Market, Anarkali Bazar is described as a double storeyed building with a covered area of 1080 sq.ft. on ground level and of 1600 sq.ft. at first floor level. The shop at Afghan Abad measures 1/2 Marla and the double storeyed house at Gulberg measures 8 Marlas. The shop at Rail Bazar, Faisalabad is spread on an area of 77 sq.ft. while the house in Anarkali Bazar is constructed on an area of 1 Marla and 1 Sarsahi. The assessing officer adopted the valuation of 1080 sq.ft. ground floor area of the Hashmi Market at Rs.18,00,000 on the ground that the District Administration had fixed a rate of Rs.4,50,000 per Marla in that Bazar. On the same basis the capital value of first floor was computed at Rs,13,33,333. The total value of this building was thus estimated at Rs.31,33,333. The value of the shop at Afghan Abad, Faisalabad was adopted at Rs.52,500 again on the ground that District Administration, Faisalabad had fixed a rate of Rs.1,05,000 per Marla for this locality. The double-storeyed house at Gulberg constructed at 8 marlas was also divided into two for the purpose of valuation. The value of ground floor was adopted at Rs.6,60,000 as allegedly the District Administration had fixed the price per Marla in the locality at Rs.82,500. The first floor was valued at Rs.3,30,000 following the suggested rates by Deputy Commissioner Faisalabad for first floor of similar properties. The shop at Rail Bazar which measures 77 sq.ft. was valued at Rs.2,13,889. Earlier it was observed that the District Administration had fixed the rate per Marla in that Bazar at Rs.7,50,000. The last property, a house in Anarkali Bazar is constructed at an area of 1 Marla and 1 Sarsahi which was valued at Rs.1,48,500. The basis again being the fixation of rate per Marla at Rs.1,35,000 by the District Administration. In this manner net wealth was computed at Rs.45,38,222 and after allowing the basic exemption the taxable wealth was reached at Rs.35,38,222.

2. Learned first Appellate Authority A.A.C., Faisalabad through his order recorded on 13-6-1995 confirmed the aforesaid valuations. It was found that the assessing officer did not make any valuation on presumption as alleged by the assessee but the rates fixed by the District Collector. The assessment order, according to the Appellate Authority, was well based and warranted on interference. This has brought the assessee in further appeal before us.

3. Learned counsel for the assessee inter alia contends that the assessing officer erred in law and in fact by blindly following the rates notified by the D.C./District Collector under section 27-A of the Stamp Act, 1899 for computation of Ad Valorem Stamp Duty. According to the learned counsel Rule 8(3) of the Wealth Tax Rules does not contemplate adoption of such method and that proviso to the Rule substituted through S.R.O. No.534(1)/94 dated June 9, 1994 also did not clothe the assessing officer with an authority to adopt valuations only on the basis of rates notified by District Collector under the said provisions of Stamp Act 1899. It is further claimed that C. B. R. Circular No. ll of 1994 re: valuation of properties for the purpose of Wealth Tax" C.No..1(2)/WT/94 dated 17th July, 1994 is partly violative of the first proviso to Rule 8(3) of the Wealth Tax Rules, 1963. Particular reference in this connection is made to the guidelines given in this Circular Letter and listed as para. 1(b)(i) and (ii). Para. (III) of this letter captioned "open plots" is also described to be ultra vires of real sense and soul of Rule 8(3) of the Wealth Tax Rules. Learned counsel vehemently contends that the assessing officer totally misconstrued the substituted proviso added to Rule 8(3) in 1994. Learned counsel has also invited our attention to C.B.R. Circular No.7 of 1994 dated July, 10, 1994 which, inter alia, enjoins upon the Deputy Commissioner of Income Tax to adopt the rates specified by District Collectors for charging of stamp duty while estimating value in respect of open plots. The following para. of Circular No.7 of 1994 is assailed as being incorrect statement of the change brought by substitution of first proviso in 1994:---

"Similarly in case of open plots, the Deputy Commissioner of Income Tax will have to value these on the rates specified by Collector of the District for charging of stamp duty (wherever available). Any deviation from this will need prior approval of the Commissioner."

4. Lastly it is claimed that the assessing officer while adopting the valuations in respect of the aforesaid properties deliberately adopted the higher rate slabs for estimation where in a locality two rates were prescribed by the District Collectors for the purpose of registration of sale-deeds. We Ore also informed that the same assessing officer for the same Assessment year 1994-95 adopted the rental value of the first property in question viz. Hashmi Market, Anarkali Bazar, Faisalabad at Rs.73,200. On the other hand while framing assessment under the Wealth Tax Act the capital value of that property has been adopted at Rs.31,33,333 i.e. more than forty times of the annual rental value adopted for the property on Income Tax side.

5. Learned D.R. on the other hand supports the orders of the authorities below stating that the assessing officer did not commit any error by adopting the valuations notified by the District Collector, Faisalabad as desired by the Central Board of Revenue. It is therefore claimed that the assessing officer rightly followed the method of computation of net wealth as provided for under the aforesaid Circulars Nos.7 and 11 of 1994.

6. Having heard the parties we are of the considered view that the assessing officer was not at all possessed with any authority to estimate the properties in question merely on the basis of or by referring to the rates notified by the District Collector under section 27-A of the Stamp Act, 1899. We will readily agree with the learned counsel for the assessee that first proviso to Rule 8(3) of the Wealth Tax Rules substituted on June 9, 1994 did not materially change or affect the mode of computation of value of lands and buildings excluding agricultural land. The proviso so added only provided that where a property was an open plot of land the Deputy Commissioner with prior approval of the Commissioner could determine the value at a sum higher than the value specified by the Collector of District for the purpose of collection or charging of stamp duty under the Stamp Act, 1899. The proviso as amended till date reads:---

?Provided that the Deputy Commissioner shall not, except with the prior approval of the Commissioner, determine the value of any property at a sum higher than (ten times the gross annual value of such property and, where such property is an open plot of land, at a sum higher than the value specified by the Collector of the District for the purposes of calculation or charging of stamp duty under the Stamp Act, 1899 ('except where such plot is purchased through an open auction or through invitation of bids or offers).?

7. The C.B.R. Circular No.7 of 1994 dated July 10, 1994 therefore is totally misconceived when it directs the assessing officers that in cases of open plots the value "shall have" to be estimated on the basis of rates specified by the Collectors of Districts for charging of stamp duty. The direction that any deviation from this will need prior approval of the Commissioner is all the more misdirected and inappropriate. The authority of the C.B.R. to frame rules and then to affect changes therein as empowered under section 46 of the Wealth Tax Act, 1963 is not denied. However, it cannot misconstrue any provision and the rule made or changed by itself. Nor it can enlarge or restrict the scope of properly notified Rule in the guise of an interpretation, explanation or elaboration. The introduction of the aforesaid proviso under Rule 8(3) in 1994 did not in any way change the criterion set forth in the main provisions of Rule 8(3). As said above the first proviso to Rule 8(3) substituted on June 9, 1994 only placed a restriction on the powers of the assessing officers in the two cases enumerated. First where they intended to adopt valuation of a property at a sum higher than ten times of tote GALV of a property and, secondly in cases of open plots of land when they wished to fix the valuation at a sum higher than the value specified by a District Collector under the said provisions of the Stamp Act, 1899. The proviso does not by itself prescribe a criterion, standard or yardstick for valuation of a property. This proviso was further enlarged on August 28, 1994 when the requirement of prior approval of Commissioner in the given condition was done away with in respect of open plots purchased through open auction, offers or invitation of bids. It will further be noted that the earlier mentioned S.R.O. 534(1)/94 dated June 9, 1994 also substituted the third or last proviso to Rule 8(3) to read "provided that the Deputy) Commissioner shall not without the prior approval of the Inspecting Additional Commissioner, estimate the gross annual rental value at a sum higher than the rent paid or payable by the tenant. From either of the two substitutions made on June 9, 1994 we do not find any authority either for the C.B.R. to direct or an assessing officer to accept the rates notified by the District Collector as a gospel truth. The third or last proviso as substituted has re-affirmed the existing practice to evaluate tenantable properties on the basis of GALV restricting further the jurisdiction of an assessing officer to seek permission of his controlling officer if the GALV is to be estimated at a sum higher than the rent paid or payable by the tenant.

8. The C.B.R. Circular 7 of 1994 dated July 10, 1994 is not only partly contradictory but also contains legal and factual mistake when it enjoins upon the assessing officers to take the value of open plots in accordance with the value determined by the District Collectors for the purpose of stamp duty. Through this Circular letter an attempt has been made to circumvent and to change for the benefit of the Revenue the existing provisions and the Rules made from time to time by the C. B. R. itself.

9. The competency of Central Board of Revenue to interpret various provisions of the fiscal statutes has long been subject-matter of discussion before the superior Courts as well as this Tribunal. In 1986 PTD (Trib.) 828 this Tribunal favoured and accepted the meaning ascribed by C.B.R. to certain provisions of the Ordinance, as these were not otherwise in conflict with the principles of interpretation of statutes. A Division Bench of this Tribunal in that case observed that no one could better appreciate connotation of a word used in fiscal law than the C.B.R. The Supreme Court of Pakistan in re: Commissioner of Income Tax, East Pakistan, Dacca v. Noor Hussain approved the course perused by the Board by giving retrospective effect to a deed of partnership for more than six months under their Circular No.8 of 1957 dated 26th of April, 1957. However, this interpretation or explanation can neither override the express provisions of an Act of Parliament nor the rules framed thereunder. For, it is by now well settled that the rules framed D under an Act of parliament have the same force. In 1994 PTD (Trib.) 1288 the nature of power of the Board to issue Circulars again came up for discussion before us. It was held that C.B.R. had no power to issue Circular which could override, modify or in effect amend the provisions of an Act. In (1995) 71 Tax 225 (Trib.) (sic) a letter issued by C.B.R. on 30-6-1991 on the subject "Notional interest in respect of interest-free loans to employees" was disapproved and the assessee was held not entitled to the benefit doled out through that letter on the ground that its issuance was not within the competency of the C.B.R. In that letter the C.B.R. though agreed that in certain circumstances a benefit did constitute a perquisite in the hands of the employee but the Board thought it not "desirable" to impute Motional income in such cases. In 1995 PTD 1212 210 I.T.R. 129 re: Kerala Financial Corporation v. C.I.T. the Supreme Court of India held that circulars issued by the Board of Revenue could not detract from or override provisions of the Act. In 1993 SCMR 1232 = 1993 PTD 766 in re: Central Insurance Company and others v, C.B.R., Islamabad etc. the assessing officer completed assessments in accordance with section 26 read with Rule 5 of the Fourth Schedule to the Ordinance. Subsequently on the basis of an interpretation issued by C.B.R. through Circular No. 4 of 1988, dated 19-4-1988 the assessing officer issued notices under section 65 of the Ordinance proposing to reopen the assessments on the ground that the income earned by them from Khas Deposits Certificates/Defence Saving Certificates had escaped assessment in the relevant years. The assessees approached the High Court in Sindh in Constitutional petitions against issuance of notices under section 65 of the Ordinance. However, these were not successful. On further appeal before the Supreme Court of Pakistan it was found that Circular explaining certain provisions of the Ordinance and made basis for reopening of the assessments could not be taken as definite information to justify reopening of completed assessments. The notices issued under section 65 and the proceedings/orders passed in pursuance thereof were held to be of no legal effect. In the process the Supreme Court also considered the status of the C.B.R. vis-a-vis the instructions issued by it from time to time and its privilege to interpret the provisions of the Ordinance. In para. 12 of the judgment it was found:

? ?.that though the Central Board of Revenue has administrative control over the functionaries discharging their functions under the Ordinance, but it does not figure in the hierarchy of the forum provided for adjudication of assessee's liability as to the tax. In this view of the matter, any interpretation placed by the Central Board of Revenue on statutory provisions cannot be treated as a pronouncement by a forum competent to adjudicate upon such a acquisition judicially or quasi-judicially. We may point out that the Central Board of Revenue cannot issue any administrative direction of the nature, which may interfere with the judicial, or quasi-judicial functions entrusted to the various functionaries under a statute. The instructions and directions of the Central Board of Revenue are binding on the functionaries discharging their functions under the Ordinance in view of section 8 so long as they are confined to the administrative matters. The interpretations of any provisions of the Ordinance can be rendered judicially by the hierarchy of the forums provided for under the above provisions of the Ordinance, namely, the Income Tax Officer, Appellate Assistant Commissioner, Appellate Tribunal, the High Court and this Court, and not by the Central Board of Revenue. In this view of the matter, the interpretation placed by the Central Board of Revenue on the relevant provisions of the Ordinance in the Circular, can be treated as administrative interpretation and not judicial interpretation.?

10. To us it appears that first proviso to Rule 8(3) was changed/substituted on June 9, 1994 only to provide for and to remove the uncertainty which existed in respect of the method of evaluation or calculation of GALV of properties which were normally not tenantable, e.g. open plots of land. Particularly those situated in approved or Government? sponsored Housing Schemes which prohibit- use of plots for any other purpose except for raising of construction, residential or commercial. Through the proviso untenantable plots and properties have also been made subject to a criteria: for evaluation in respect of which estimation of GALV appeared inapplicable or inappropriate. The proviso is clearer than crystal that an assessing officer in respect of open plots may adopt methods other than estimation of GALV and in this connection he can also take into account the rates notified by District Collectors under the Stamp Act. The jurisdiction of the assessing officers here again is subject to the condition that they will not except with the prior approval of the Commissioner evaluate a plot at a rate higher than the one fixed by the District Collector for levy of stamp duty. To say that even in cases of open plots an assessing officer will mechanically adopt those rates is totally incorrect and a travesty of the sense and language of the proviso. Even if for a while we accept the authority and the manner in which the C.B.R. has exercised its powers by issuing the aforesaid guidelines for the assessing officers, the way the assessing officer acted in the case before us and the first Appellate Authority confirmed the assessment order cannot be condoned. Both of these Circular Letters repeatedly say that it is only the market value of "open plots" which shall be taken equal to the value specified by the District Collectors for the purpose of stamp duty. These letters also agree that market value of houses and commercial buildings which have been let out shall be determined at 10 times of the GALV of such properties. Both of these letters, we would like to repeat suffered from patent illegality when these modified the plain wording of the first proviso to Rule 8(3) by saying that value of open plots shall invariably be the value determined by the District Collectors under the Stamp Act. Also Circular Letter No.11 of 1994 converts the rates into exception when it provides that if determination of value on the basis of rates notified by the Collector is not possible only then the valuation shall be computed on the basis of GALV. Further that properties let out shall be valued on the basis of GALV and those never let on rent shall be valued on the basis of rates notified by the District Collectors. Here an unnecessary distinction between the properties previously rented out and those which were never so rented out or were under self-occupation has been created.- The segregation operates against the basic principle in such cases that GALV of a property is only a notional value. The actual rent being fetched by a property is only one of the considerations to be kept in mind while determining the GALV of a property. The definition of this term as contained in explanation to Rule 8(3) only confirms the principle. Thus para. 1 of Circular No. 11 of 1994 gives an interesting reading:---

Residential Houses/Apartments:

(a)??????? The market value of houses and apartments which have been let out is to be determined at ten times the gross annual letting value of such property.

(b)??????? The market value of houses/apartments which have never been let out in the past is to be determined in the following manner:

(i)???????? The value of land shall be taken equal to the value specified by the District Collector for the purpose of Stamp Duty; and

(ii)??????? the value of the building itself would be computed at the rates of cost of construction adopted by the District Collector for the purpose of Stamp Duty and in the absence of such rates the rates adopted by the Local Development Authority or the municipal body for the purposes of similar construction (of its projects); where such rates differ, the highest of these shall be adopted;

(iii)?????? where valuation through any of these methods is not possible the assessing officer may estimate the gross annual letting value keeping in view the gross annual letting value of similar property in that or the nearest locality. "

11. It may be recalled that the above as well as Circular No.7 of 1994 were apparently issued to guide the assessing officer on the "changes" brought in the valuation regime after re-incarnation of the first proviso in June, 1994. The reasons that prompted issuance of two lengthy Circular Letters in quick succession, No. 7 on July 10, 1994 and No. 11 on 17th July, 1994 to explain the said proviso must be mystical as the connection between the proviso and the anecdotes in the Circular Letters is visibly missing. If the idea was to clear the confusion prevailing in wealth tax valuation regime, the results are exactly the opposite of what was desired to achieve. The assessment before us being the quotable example. The proviso in fact simply lays down that where an assessing officer would venture to estimate the value of an open plot at a sum higher than the value specified by the District Collector or ten times of the GALV in cases of other immovable properties he shall seek permission of his controlling officer, the Commissioner. Nothing could be simpler and straight.

12. The assessment in question before us has been framed in a casual manner and betrays lack of application of mind. It is totally mechanical. The returned versions in respect of various properties have not even been mentioned nor any basis have been given for their substitution with those determined by the assessing officer. Mere reference to the rates fixed by District Administration does not mean anything. The method adopted by the assessing officer is neither in conformity with Rule 8(3) of the Wealth Tax Rules, 1963 nor in consonance with the decisions made by this Tribunal from time to time. The assessing officer himself having adopted the valuation on GALV basis in respect of the first property on income-tax side, he could not deviate from the same in absence of any justifiable reason. At any rate since no open plot was declared in the net wealth return by the assessee, the directions and guidelines issued under the said two Circular Letters were not relevant. Since no reason has been brought home to deviate from the ALV adopted on income-tax side, it is directed that the annual letting value estimated at Rs.73,200 shall be made basis for determining the capital value of the first property, Hashmi Market, Faisalabad. The other four properties are stated to be in the possession of the assessee as owner. The valuation shall be determined keeping in view the provisions of said Rule 8(3) as also the history of the case if these properties existed with the assessee in the previous year as well. The assessing officer shall also consider the prayer that 1/2 share in the last-mentioned property, house in Street No.6 Anarkali Bazar, Faisalabad is owned by him only to the extent of 1/2 share.

13. The upshot of the above being that the assessment as well as the first appellate orders are set aside and the assessing officer is directed to frame fresh assessment in the light of the above directions.

M.B.A./234/Trib. ??????????????????????????????????????????????????????????????????????????????? Order accordingly