I.T.A. NO.4790/LB OF 1997, DECIDED ON 8TH JANUARY, 1998. VS I.T.A. NO.4790/LB OF 1997, DECIDED ON 8TH JANUARY, 1998., 1998 PTD-INCOME-TAX-APPELLATE-TRIBUNAL-PAKISTAN 3395 (1998)

Income Tax Ordinance (XXXI of 1979)---

----S.13(1 )(d)---Income Tax Rules, 1982, R.207-A---Addition---Validity-- A,ssessee purchased shop and declared its value as per Registered Deed which was based upon District Collector's rates-- -Assessing Officer adopted higher value---Appellate Authority reduced the addition giving partial relief to assessee---Validity---Held, sanctity of registered deed should not be disturbed, unless department was in a position to find something contrary to or had some evidence otherwise--No such evidence was found by Appellate Authority, addition was deleted accordingly.

1966 PTD (Trib.) 1096 and 1995 PTD (Trib.) 1182 rel.

Azhar Iqbal, F.C.A. for Appellant.

Farooq Tahir, D.R. for Respondent.

Date of hearing: 7th January, 1998.

ORDER

KHAWAJA FAROOQ SAEED (JUDICIAL MEMBER). ---This assessee appeal is against partial reduction is sales as well as addition made under section 13(1)(d) on purchase of shop.

2. Brief facts of the case are that the assessee declared his sales at Rs.785,500 which the I.T.O. pitched at Rs.1,400,000. Before the First Appellate Authority the assessee contested this treatment who found that in the immediate preceding year the declared sales of the assessee at Rs.600,000 were estimated at Rs.1,000,000. He, therefore, reduced them to Rs.1,200,000. The A.R. says that the treatment given by the First Appellate Authority is still excessive as assessee himself has declared a reasonable increase in the same. "

3. The D.R. does not agree with the arguments of the A.R. He says, the treatment already given is reasonable to which we also agree. The estimate of Rs. L,200,000 in keeping view the previous treatment is not excessive. The same is hereby confirmed.

4. The other addition impugned before us is on account of purchase of shop, value of which has been declared at Rs.7,74,000. The shop is measuring 350.62 sq.ft and the value declared by the assessee is as per registered deed which is obviously based upon the D.C. rates. The A.R. has argued that value of the property in such circumstances should not have been enhanced without having material proof. He said that the sanctity of the registered deed and the agreement between the two Muslims is tot to be doubted unless there is some material evidence available with the department. He further argued that the department's reliance is upon a case wherein the Assessing Officer proposed to make higher estimate and could not succeed, as the assessee went in a Writ, which has been accepted by the High Court for hearing and is pending adjudication. He further added that even if such value, would have been adopted by the department the same could not be applied. On the circumstances of the impugned case being supported by the value of the District Collector which is now protected by the circular of C.B.R. as well as rule 207-A which is as follow:---

"Rule 207-A. Valuation of immovable properties.---The valuation of immovable properties for the purposes of section 13 of the Income Tax Ordinance, 1979 shall be taken to be---

I.In the case of open plots the value determined by the DevelopmentAuthority or Government Agency on the basis of auction price in respect of similar plots in the area where the plot in question is situated.

II. In other cases the value determined by the District Collector for the purposes of stamped duty.

III. In the case of properties given on rent, equal to ten years capitalized value based on annual rental value as defined in clause (b) of subsection (2) of section 19 of the Ordinance.

IV.In the case of agricultural land equal to the average sale price of the sales recorded in the Revenue Record of the estate in which the land is situated."

5. Above rule he said is binding having been assessed under delegated power of legislation available with the C.B.R. under section 13(3). In support of his arguments he further relied upon the judgments reported as 1996 PTD (Trib.) 1096 and 1995 PTD (Trib.) 1182.

6. The D.R., however, said that the estimate by the I.T.O. as confirmed by the First Appellate Authority is fully justified and needs no interference. He said that the property exists at a very important place of Faisalabad and the value declared by the assessee is low.

7. In our opinion the arguments advanced by the learned A.R. are stronger. It has been held by the Tribunal in a chain of judgments, two of which have been filed by the learned A.R. that the sanctity of a registered deed should not be disturbed, unless the department is in a position to find something contrary or have some evidence otherwise. Moreover, in view of the binding nature of the rule referred by us supra, there is no question of any addition in the value of the property impugned before us. We, therefore, delete the addition made by the IT.O.

8. The assessee appeal is allowed in the manner and to extent as mentioned above.

C.M.A./558/Trib.Appeal allowed.