I.T.A. NO.2702/LB OF 1995 VS I.T.A. NO.2702/LB OF 1995
1997 P T D (Trib.) 2339
[Income-tax Appellate Tribunal Pakistan]
Before Nasim Sikandar, Judicial Member and Shariq Mahmood, Accountant Member
I.T.A. No. 2702/LB of 1995, decided on 05/10/1996.
(a) Income Tax Ordinance (XXXI of 1979)--
----Ss.22 & 13(1)(d)---Income from business---Purchase of Plot ---Addition-- Validity---Assessee returned income alongwith wealth statement regarding one plot in pursuance of notice under S.56---Assessing Officer, finding returned value of plot on lower side and keeping in view parallel case, assessed at higher figure---Addition was made as deeming income---C. I. T. (Appeal) set aside assessment with direction that assessment be made in light of fair market value---In second round of assessment another plot was confronted ---Assessee's reply was found contrary to facts---Assessing Officer repeated income and addition as earlier was made ---C.I.T. (Appeal) found assessment fair and appeal was dismissed---Held, Assessing Officer failed to substantiate his own estimate of price of plot and that his confrontation of parallel case should be taken as base line---In parallel case adoption of price was agreed one---Area of plot was almost 1/2 of purchased one by assessee, therefore, adopted price should also be somewhat lesser than the agreed one between revenue and assessee.
(b) Income Tax Ordinance (XXXI of 1979)-
----Ss.144 & 148---Power to take evidence---Before Tribunal request was made by assessee that concerned Authority (LDA) alongwith record be called for determining real situation---Held, application ought to have been made at original stage or at least before First Appellate Authority---Since such application was not made before Authorities below, Tribunal refused to entertain application for production of additional evidence at that belated stage of second appeal.
Siraj-ud-Din Khalid for Appellant.
Sabiha Mujahid, D.R. for Respondent.
Date of hearing: 20th August, 1996.
ORDER
NASIM SIKANDAR (JUDICIAL MEMBER).---An individual through this further appeal for the year 1991-92 assails an order of CIT(A)-IV Lahore recorded on 10-6-1995. The sole source of grievance appears to be the valuation and confirmation of 1 Kanal plot at Rs.10,00,000.
2. The assessee individual appears to have been served with a notice under section 56 of the Income Tax Ordinance to file return for the year 1991-92. The return was filed on 28-12-1992 returning total income at Rs.68,159 being 1/3rd share from a firm Messrs Mumtaz Engineering The Mall Lahore. The wealth statement accompanying return indicated purchase of 1 Kanal 64.13-1 Johar Town, Lahore for a consideration of Rs.2,44,200 including incidental charges. The assessing officer in the original proceedings found the returned value to be on the lower side on the ground that in the same assessment year another assessee of his Circle agreed for adoption of a value of Rs.3,25,000 for 12 Marla plot. In the proceedings that ensued an assessment was finally made on 29-8-1994 at total income of Rs.8,48,159. This included an addition of Rs.7,00,000 being the estimated price of the plot in question and considered deemed income under the provisions contained in section 13(1)(d) of the Ordinance. Earlier the submissions made in reply to the notice dated 13-4-1993 affirming the returned price to be fair market value was found unconvincing. On first appeal the assessment so framed was set aside by C.I.T.(A)-VI Lahore on 5-7-1994 with the directions that the value of the plot should be assessed in the light of fair market value after proper confrontation.
3. In the second round the assessee was confronted with yet another Plot No. 117/13-1 Johar Town, Lahore alleged auctioned by the L.D.A. for Rs.55,000 per Marla. The reply made by the assessee was again found contrary to facts and, therefore, the income as well as addition earlier made at Rs.7,00,000 was repeated through the second assessment order framed on 30-11-1994.
4. Learned first Appellate Authority CIT(A)-VI, Lahore whose order dated 10-6-1995 is now being impugned before us found the valuation adopted in respect of the plot in question to be fair and the submission made against the assessment order to be devoid of any merits. Rosultantly the appeal was dismissed. This has brought the assessee before us.
5. Parties have been heard. Learned counsel for the assessee contend< that the assessing officer failed to carry out the exact sense and directions contained in the first appellate order remanding the issue. It is stated that in that order learned first appellate authority found the estimated value to be or the higher side but the assessing officer repeated the same value after remand which amounted to disregard of the directions contained in the remand order It is also submitted that Plot No.117/D-1 measures only 5 Marlas and this plot was never auctioned as alleged by the Assessing Officer in second round of assessment proceedings. Learned counsel has also made an application to summon the concerned authorities Estate Officer L.D.A. alongwith record so that the real situation-with respect to the confronted Plot 117: D-I could be determined. The impugned order is otherwise described as cursory, and betraying lack of proper application of mind. We are informed that plot in question has already been disposed of by the assessee on 18-1-199-1 allegedly for a sum of Rs.2,50,000.
6. Learned D.R. on the other hand supports the orders of the authorities below for the reasons stated therein.
7. Having heard the parties we are inclined to partly agree with the submissions made at the bar for the assessee. In the first instance rejection of registered value needs a high degree of evidence or solid basis which does not appear present in this case. Also the assessing officer appears uncertain about the value of the plot inasmuch as in the first round the assessee was confronted with an alleged parallel case in which another assessee of the area agreed to the estimation of a 12 Marlas plot at Rs.3,25,000 indicating per Marla rate at Rs.27,083. In the second round he made reference to another plot which according to the assessee was never auctioned much less to say of yielding a rate of Rs.55,000 per Marla. The area of this plot is also described at 5 Marlas only which again implies that a higher price was paid for it even if the remarks made by the assessing officer are accepted as correct. We have considered the application of the assessee for adducing additional evidence. However, we do not consider it proper to enter upon the kind of inquiry we are being requested. This application ought to have been made at the original stage or at best before the first appellate authority. In absence of any such attempt before the authorities below from the assessee who has continuously been agitating that the plot in question was never auctioned, we will-refuse to entertain the application for production of additional evidence at this belated stage of second appeal.
8. However, as observed earlier we are clear in our mind that the assessing officer failed to substantiate his own estimated price of the plot. In this situation we will hold that his confrontation for the alleged parallel case of another assessee of the same area through notice dated 13-4-1993 should be taken as base line. In the notice the aforesaid assessee Mr. Zahid Imtiaz NTN 14,97,565 allegedly agreed the adoption of value of a 12 Marlas plot at A Rs.3,25,000. The per Marla price comes approximately to Rs.27,083. The area of the plot being almost one half of the one purchased be the assessee the price to be adopted should also be somewhat less than the one which was agreed upon between the Revenue and the assessee Mr. Zahid Imtiaz in the Parallel case. Since nothing else has been brought on record except to compare the alleged parallel case, we will hold that a sum of Rs.23,000 per Marla shall be adopted as fair market value of 1 Kanal plot in question.
9. Accordingly this appeal succeeds in the manner and to the extent indicated above.
C.M.S./325/Trib. Appeal allowed.