I.T.AS. NOS. 9820/LB AND 9634/LB OF 1991-92 VS I.T.AS. NOS. 9820/LB AND 9634/LB OF 1991-92
1997 P T D (Trib.) 2383
[Income-tax Appellate Tribunal Pakistan]
Before Shariq Mahmood, Accountant Member and Nasim Sikandar, Judicial Member
I.T.As. Nos. 9820/LB and 9634/LB of 1991-92, decided on 27/08/1996.
Income Tax Ordinance (XXXI of 1979)---
----S. 13(1)(d)---Deemed income--Unexplained investment ---Addition--- Assessee was assessed at high rate with addition owing to investment made in acquiring two properties---First Appellate Authority confirmed assessment in one case and gave partial relief in the other---Both assessee and department went into cross-appeals before Tribunal---Held, two properties having similar situation deserved the same treatment---Revenue had not been able to make out case in favour of impugned assessment---Additions were accordingly deleted and cost of properties as declared was accepted.
Muhammad Yaqoob, P.C.A. for Appellant (in I.T.A. No.9820/LB of 1991-92). .
Mrs. Sabiha Mujahid, D.R. for Respondent (in I.T.A. No.9820fLB of 1991-92).
Mrs. Sabiha Mujahid, D.R. for Appellant (in I.T.A. No.9634/LB of 1991-92).
Muhammad Yaqoob, P.C.A. for Respondent (in I.T.A. No.9634/LB of 1991-92).
Date of hearing: 27th August, 1996.
ORDER
SHARIQ MAHMOOD (ACCOUNTANT MEMBER). ---Return for the assessment year 1988-89 was filed by an individual declaring an income of Rs.1,01,760 having been derived from salary and property. Assessment was made at an income of Rs.2,67,660 which had included additions of Rs.51,325 and Rs.1,10.975 under section 13(1)(d). These additions, according to the I.T.O. were necessitated owing to the investment made in acquiring of two properties.
(i) House No.P-91/122, Jinnah Colony, Faisalabad.
2. In the wealth statement filed the assessee had shown 1 /2 share in the house at Rs.3,00,000. The total area of the plot was 10 Marlas 65 sq. ft. The I.T.O., after field enquiry, observed that the investment in the house had been understated and further the assessee had also renovated the house. The Assessing Officer accordingly worked out the value of the property (inclusive of renovation) at Rs.7,02,650 and after giving credit to the declared amount of Rs.3,00,000 he added the difference of Rs.51,325 under section 13(1)(d). Before doing so he duly confronted the assessee with specific notices under sections 62 and 13.
3. The reply of the assessee at the time of assessment proceedings was that the registered value of the house was Rs.400,000 (half share at Rs.200,000) and that no renovation had been carried out. Under the circumstances the declared value was more than the rates prescribed by the district administration for registration purposes and as such the investment at Rs.300,000 being reasonable should be accepted.
4. After the reply of the assessee was not accepted an addition of Rs.51,325 made under section 13(1)(d). Appeal was preferred where the CIT(A) vide its abovementioned order confirmed the addition on the analogy of the treatment accorded in the case of the other co-owner (Mian Maqsood Ahmed).
(ii) House No.P-20 Jinnah Colony, Faisalabad:
5. In this property the assessee again holds 1/2 share with his sister-in-law (Brother's wife). The property is situated in the same locality (Jinnah Colony) and is on an area of 13 Marlas, 61 sq. ft. Value in the wealth statement was shown at Rs.350,000 again the registered Rs.450,000 (1/2 share Rs.225,000). The I.T.O. again finding that the declared value was not reasonable and renovation had been carried out and worked out the total value at Rs.921,950 wherein the assessee's share came to Rs.460,975 and after giving credit to the declared amount of Rs.350,000 added Rs.110,975 under section 13(1)(d). During the course of assessment proceedings the point of view of the assessee and the reply to notices under sections 62 and 13 were on the same lines as in case of the abovementioned property.
6. In appeal the CIT(A) reduced the cost of plot from Rs.55,000 per Marla to Rs.52,500 and cost of construction of renovation from Rs.100 per sq. ft. to Rs.75 per sq. ft.
7. Against the above decision of the First Appellate Authority 10th the assessee and Revenue are now before us where the assessee maintains that the confirmation of addition in the first house is without any justification and the reliefs allowed in the second property are also not called for. The Department, on 'the other hand, objects to the curtailment of cost of plot from Rs.55,000 per Marla to Rs.52,500 per Marla and renovation cost from Rs.100 to Rs.75 per sq. ft.
8. The learned A.R., arguing on behalf of the assessee maintains.
9. Property : 91/122
That in the case of other co-owner when the addition was confirmed by the CIT(A) (on the basis of which additions in hand of the assessee has also been confirmed) appeal was preferred wherein vide I.T.A. No.4024/LB of 1991-92, dated 11-12-1995 the entire addition was deleted and it was directed that the declared value of the property should be accepted. Based, on this analogy it was pleaded that when facts and circumstances of the case were identical, therefore, the same yardstick and parameters should be applied. In support of his case the A.R., also referred to the treatment of the Department maintaining that the plot valued at Rs.55,000 per Marla (1/2 share at Rs.281,575) was less than the value declared at Rs.300,000 by the assessee himself. On the point of renovation it was pleaded that none had been carried out as no evidence, proof or material had been brought on record by the Department in support of its treatment. The report of the Area Inspector was also without any evidence and at the same time it was not? relevant as it had been conducted in 1990 while the property had been purchased in June, 1988. In view of these facts the declared value deserved to be accepted.
10. The learned D.R., other than relying on the treatment of the observations of I.T.O. could not controvert the submissions made on behalf of the assessee. It was, however, pleaded that the action of the authorities below should be maintained.
11. We have considered the two points of view and keeping on consideration the earlier decision in the case of the other co-owner and that the Revenue has not been able to support its observation regarding the renovation we would direct that the addition be deleted and the declared value accepted.
Property No.P-20
12. Objecting to the partial relief allowed by the CIT(A) the learned A.R., was of the view and opinion that the factors and circumstances of the investment in this property were the same as in respect of the above. Not only it was situated in the same locality, the value attached to the plot at Rs.55,000 per Marla (1/2 share Rs.363,675) was almost the same as declared by the assessee at Rs.350,000. Further, the. aspect of renovation had nowhere been substantiated. This having been made on the same observations as in case of the first property deserved to be deleted.
13. The learned D.R. supports the actions of the authorities below and relies upon the findings of the First Appellate Authority maintaining at the same time that the relief allowed by the CIT(A) was not called for and the additions made by the I.T.O. should be restored.
14. We need not go further into the additions made under this head and find that assessee has declared the value of the property as worked out by the Department. No case has been made out viz-a-viz incurring of any expenditure on renovation. The two properties being situated in the same locality and additions having been worked out on similar lines deserve the same treatment. It is accordingly directed that the addition be deleted and declared cost accepted.
15. The two appeals stand disposed of accordingly wherein the Department fails in toto and the assessee succeeds.
C.M.S:/391/Trib. ???????????????????????????????????????????????????????????????????????????????? Order accordingly.