(a) Income Tax Ordinance (XXXI of 1979)---

----Ss.13(l)(b) & 91---unexplained investment---Addition---Filing of wealth statement prior to finalisation of assessment---Effect---Addition was made and penalty under S.91 of the Income Tax Ordinance, 1979 was imposed for non-payment of tax---First Appellate Authority confirmed the same-- Validity ---Assessee, held, was entitled to file wealth statement prior to finalization of assessment, and amount of addition having been shown in the wealth statement addition could not be made.

(b) Income Tax Ordinance (XXXI of 1979)---

----Ss.13(1)(e) & 91---Unexplained investment ---Addition---Expenses-- Imposition of penalty---Addition was made and penalty was imposed---Held, assessee being of old age and living with family members and leading a simple. life there was no justification to uphold additions under S.13(1)(e) of the Income Tax Ordinance, 1979- ;-Additions made under different provisions of S.13 of the Ordinance having been deleted, there was no reason to uphold penalty imposed and confirmation by Revenue Authorities.

Muhammad Iqbal Hashmi, A.R. for Appellant.

Muhammad Akram Tahir, D.R. for Respondent.

Date of hearing: 9th June, 1996.

ORDER

CH. MUHAMMAD ISHAQ (JUDICIAL MEMBER). ---These appeals pertaining to the assessment year 1990-91 and 1991-92 have been preferred at the instance of the assessee to call in question the Order dated I1-8-1992 passed by the Commissioner of Income Tax Appeals-II), Lahore. For both these years appeals have also been lodged against the imposition of penalty under section 91 of the Income Tax Ordinance, 1979 vide Order dated 24-1-1993 passed by the CIT (Appeals-II) Lahore.

2. The learned A.R. appearing for the assessee appellant agitates the additions made under section 13(1)(b) at Rs.2,09,999 for the year 1990-91 and under section 13(1)(e) at Rs.35,800 & Rs.37,476 for the years 1990-91 and 1991-92 respectively as being uncalled-for. Imposition of penalty in respect of both the years had also been agitated as being unjustified.

3. We have heard the parties and examined the record.

4. The learned A.R. submits that the addition at Rs.2,09,999 made under section 13(1)(b) is not justified as the same has been made without considering the reconciliation statement filed by the appellant. It is submitted that the addition was wrongly confirmed by the CIT (Appeals). The learned counsel explains that this addition could be made only when the investment was not shown in the wealth statement. It is also submitted that the said amount of addition, in fact, was not an investment, therefore, no addition, under section 13(1)(b) could be made. It is further submitted that the said amount of alleged investment was brought forward from the previous years and if at all could be added, the same could be done in respect of the previous year/years and not in the assessment year under review. This explanation offered to the Assessing Officer and the learned CIT (Appeals) was not considered. The learned DR, on the other hand, submits that the afrore-stated explanation of the assessee was duly considered and rejected by the CIT (Appeals). Therefore, it could not be said that the assessee's explanation was disregarded. The Record shows that the explanation was considered and rejected as being unsatisfactory.

5. Considering the contention of the parties, it is noticed that the addition of the amount under section 13(1)(b) was made after the discrepancy in the Wealth Statement was pointed out by the Assessing Officer to the appellant. The assessee, however, revised his Wealth Statement and explained that the discrepancy indicated at Rs.2,10,000 was the actual amount with the company and balance as on 1st December was mistakenly written which was corrected in the revised Wealth Statement. The learned D.R. admits that the revised Wealth Statement could be filed by the assessee before the assessment was finalised. In this case, the revised Statement was filed before the completion of the assessment. This being so, the revised statement should have been accepted by the officers below but appears to have been wrongly disregarded.

6. The examination of the law shows that under section 13(1)(b), the addition can be made only where the assessee is found to have made any investment in any income year which is not recorded in. the books of account maintained for that income year or is not shown in the Wealth Statement furnished under section 58 in respect of that year. The law, as is seen, is very clear. Admittedly, addition can be made under this provision where it is found that the assessee had made investment. It can be made in that income year alone if it is not recorded in the books of account or not shown in the Wealth Statement. In this case, the contention of the appellant that it is neither investment nor any allegation against the appellant that it is not recorded in the books of account or wealth statement. From the examination of this provision of law as applicable to the facts of this case, it can be concluded that: --

(a) The Wealth Statement filed by the Assessee prior to the finalisation of the assessment was assessee's entitlement and should have been considered as having been properly filed; and

(b) that since the amount of addition was shown in the statement, it could not be added under the provisions of section 13(1)(b).

7. In view of these reasons, we are not inclined to support the addition made under section 13(1)(b) of the Income Tax Ordinance, 1979. It may further be brought on the record that the aforestated addition was confirmed by the CIT (Appeals) on the grounds of filing inaccurate particulars by the appellant. We have already declared above that the revised statement covered the discrepancy appeared to have copped on account of inadvertence. There remains no justification for the addition under this provision of law. Consequently, this addition being uncalled for is directed to be deleted.

8. Regarding the additions under section 13(1)(E) at Rs.35,800 & Rs.37,476 for the assessment years 1990-91 & 1991-92 respectively, we notice that the assessee's explanation was not examined in its proper perspective. It is on the record that the assessee is of old age and living jointly with other three families. It is also on the record that he is not living a luxurious life as he does not maintain a car or motorcycle. The contention of the learned DR that notices were served but not attended to be the assessee may be true but the explanation offered by the assessee in writing is available on the record, the contents of which have already been referred to above. We are of the view that the submissions of the learned A.R. to this effect appear to be weighty. In the circumstances of this case, therefore, we decline to uphold the additions made under section 13(1)(e) of the Income Tax Ordinance, 1979.

9. The order dated 24-1-1993 passed by the CIT (Appeals-II). Lahore pertaining to the confirmation of penalty imposed under section 91 of the Income Tax Ordinance, 1979 is cancelled. The reason being that the additions made under various provisions of the section 13 have been deleted by us wile deciding the main appeals pertaining to both years under appeal.

10. In view of the aforestated reason, all the appeals succeed as indicated above.

C.M.S./376/Trib. Appeals allowed.