I.T.A. NO.8367/LB OF 1991-92 VS I.T.A. NO.8367/LB OF 1991-92
1997 P T D (Trib.) 2362
[Income-tax Appellate Tribunal Pakistan]
Before Abdul Rashid Qureshi, Judicial Member and Ashfaq Ahmad, Accountant Member
I.T.A. No.8367/LB of 1991-92, decided on 14/10/1996.
Income Tax Ordinance (XXXI of 1979)----
----S. 13---Unexplained investment---Addition---Assessing Officer made additions under various provisions of S. 13 of the Income Tax Ordinance, 1979 which were set aside by First Appellate Authority for de novo assessment---Validity---Held, setting aside of order of Assessing Officer was illegal and incorrect---Unless Assessing Officer had some tangible material to differ from sale-deed; no addition under S.13(1)(d) of the Income Tax Ordinance could lie made---Addition made under S. 13(1)(b) of the Ordinance could not be deleted merely on the basis of affidavit---Since department itself had accepted household expenses in previous years, additions under S.13(l)(d) of Ordinance was not sustainable.
1979 PTD (Trib.) 19; 1985 PTD (Trib.) 178; I.T.A. No. 1249/LB of 1992; I.T.A. No. 375/LB of 1989-90; I.T.A. No.370-/LB of 1989-90 and 1996 PTD (Trib.) 327 ref.
Muhammad Sarfraz, F.C.A. for Appellant.
Nemo for Respondent.
Date of hearing: 4th June, 1996.
ORDER
ASHFAQ AHMAD (ACCOUNTANT MEMBER).---The appellant has assailed the order of the learned CIT (A) for the assessment year 1991-92. The appellant is aggrieved on account of additions under sections 13(1)(d), 13(1(e) and 13(1)(b).
2. The brief facts of the case are that the I.T.O. made an addition under section 13(1)(d) at Rs.1,50,000 as he felt that the declared price of the flat under stated.
3. An addition of Rs. 15,000 was made under section 13(1)(e) as the I.T.O. felt that the price paid to maid servant 3,000 was inadequate and the same was adopted at Rs.15,000.
4. The appellant declared total household expenses at Rs.51,482 which were held to be inadequate by the assessing officer and he estimated the same at Rs.1,20,000 thereby making an addition of Rs:68,580.
5. An addition of Rs.32,008 was made under section 13(1)(b) on account of income tax paid on behalf of the appellant by the nephew.
6. The assessee being aggrieved preferred appeal before the CIT(A) who set aside the order of the I.T.O. for de novo, decision on all the additions made under section 13.
7. During the course of the hearing the learned A.R. argued that the setting aside by the learned CIT(A) on various additions under section 13 vide his order dated 10-11-1991 is illegal and incorrect in the circumstances of the case and had relied on the following decision;
1979 PTD (Trib.) 19.
1985 PTD (Trib.).178.
I.T.A. No. 1349/LB of 1992, dated 13-9-1992.
I.T.A. No. 375/LB of 1989-90, dated 9-2-1991.
8. The learned A. R. vehemently argued that all the information/documents had already been provided to the assessing officer at the time of assessment and hence the setting aside of the case was not warranted. In this context he cited a paragraph of the order of the ITAT in I.T.A. No.370-/LB of 1989-90 dated 9-2-1991 in which it was observed;
"On perusal of the impugned order it appears that the learned CIT(A) has set aside the impugned order because he thought that it was based on guess work. However, he felt that by setting aside the assessment order the learned CIT(A) has provided the assessing officer with another opportunity to filling in the gap which is surely not permissible."
9. The circumstances discussed above and taking into account the various case laws cited by the appellant's A.R. the setting aside of the order was illegal and incorrect. In this context it is also relevant to bring on record-that the perusal for the order of the CIT(A) shows that he appears to have agreed with the contention of A.R. in respect of additions under sections 13(1)(d) and 13(1)(e). He has also cited a number of reported judgments submitted by the learned A.R. but has not commented on the same. Therefore, grounds relating to various additions under section 13 are disposed of as under:
10. The appellant has purchased a flat No.36 in Babar House at 6th Floor, Nishtar Road Karachi for Rs.255,000 including incidental expenses. The assessing officer has assessed the value of the flat at Rs. 405,000 without bringing any material on record. The learned A.R. has drawn our attention to the assessment order which is clear on the subject. It has also been stated that the flat was sold in 1992 for Rs. 365,000 after a period of four years. The learned A.R. relied on various decisions of the ITAT in this respect. In reported order of the ITAT 1996 PTD (Trib.) 327 it has been observed that unless the assessing officer has some tangible material to differ from the sale deed being a legal document which is based on three statutes viz Transfer of Property Act, 1982, Registration Act, 1908 and Stamp Act, 1899 no addition under section 13(1)(d) could be made. Even otherwise the I.T.O. has accepted the sale of flat at Rs. 365,000 after four years. The amount declared at Rs. 250,000 which comes to Rs. 378 per sq. ft. appears to be reasonable. The addition under section 13(1)(d) is, therefore, deleted. (Other reported cases were also cited by the A.R.).
11. The learned I. T. O. has made an addition of Rs. 15,000 on account of salary of part time servant. The learned A.R. pointed out that in the assessment years 1989-90 and 1990-91 the declared part time servant salary of Rs. 4,800 and Rs.6,000 per annum respectively has been accepted vide orders dated 13-6-1991 . Since the department itself has accepted the house hold expenses in the subsequent years the addition made under section 13(1)(e) is deleted.
12. The assessing officer has made an addition of Rs.68,518 by enhancing the declared household expenses of Rs. 51, 482 to Rs. 120,000. Here again the A.R. has pleaded that in the subsequent years i.e., 1989-90 and 1990-91 the declared household expenses at Rs.55,151 and Rs.58,563 respectively have been accepted vide order dated 13-6-1991. Since the department has accepted the household expenses in the subsequent years the addition under section 13(1)(e) warranted to be deleted. We, therefore, order that the addition of Rs.68,518 under section 13(1)(e) be deleted.
13. It was stated by the learned A.R. of the assessee that the nephew of Mr. Irfan Ellahi purchases a Pay Order No.987134, dated 14-11-1987 for Rs.32,008 for payment of tax of uncle, the appellant Mr. Zafar Amin. Certificate from bank dated 8-5-1990 stating that the pay order of Rs. 32,008 was purchased by Mr. Irfan Ellahi and the affidavit of Mr. Irfan Ellahi dated 8-5-1990 was submitted to the assessing officer at the time of assessment. In the affidavit Mr. Irfan Ellahi deposed as under:--
(1)I am an existing assessee at NTN 1230992 and that I have purchased pay order for my uncle Mr. Zafar Amin who is also a partner of M/s Akbari Store.
(2)That the said pay order of Rs.32,008 was purchased by payment of cash which has not yet been received from my uncle Mr. Zafar Amin.
14. The learned A.R. vehemently argued that the Learned I.T.O. has got no material on record to prove that bank certificate issued by the Manager and affidavit of Mr Irfan Ellahi were incorrect. The learned A.R. has relied on reported decision (1993) 68 Tax 155 Trib ' i addition under section 13(1)(b) was deleted for not giving due weight to the affidavit of the seller of the property.
15. We have considered the contentions of the A.R. but do not find much weight in his plea. The assessing officer while making addition has stated in the body of the order;
"The assessee was confronted regarding the non-declaration of amount of income tax paid. The assessee replied through his A.R. letter dated 10-5-1990 that amount of tax was paid by Mr. Irfan Elahi who is also the assessee at NTN 1230992. The assessee has not shown the expense in his expenditure statement and at the same time he has not shown liability in his wealth statement. As such there is no discrepancy at all. The contention of the assessee is completely incorrect. As two wrongs cannot be made once correct. It was obligatory on, the assessee to declare the expenditure on account of income tax in his expenditure statement and at the same time he would have shown it as a liability, if at all it was paid by Mr. Irfan Elahi. "
In the light of the observations, of the assessing officer which the A.R. was not able to controvert, the mere filing of affidavit does not carry much weight. The amount added under section 13(1)(b) at Rs. 32,008 is therefore, confirmed.
C.M.S./389/Trib.Order accordingly.