W. T. A. NO.27(IB) OF 1999-2000 VS W. T. A. NO.27(IB) OF 1999-2000
2001 P T D (Trib.) 13
[Income-tax Appellate Tribunal Pakistan]
Before Syed Masood ul Hasan Shah, Judicial Member and Mansoor Ahmed, Accountant Member
W.T.A. No.27(IB) of 1999-2000, decided on 17/08/1999.
Wealth Tax Act (XV of 1963)---
----Second Sched., c1.12(1), (2) & First Sched., Part I, para. A, sub para. (2), proviso ---Exemption---Assessee claimed exemption of shop being self-occupied and statutory exemption of Rs.10,00,000---Statutory exemption of Rs.10,00,000 was rejected on the ground that exemption of Rs.10,00,000 and a shop at the same time was against the spirit of law as the law provides self-occupied shop + self-occupied house or Rs.10,00,000---Validity-- Exemption of Rs.10,00,000 was not allowable to an assessee exercising option under cl. (12) of Part I of the Second Sched. for his claiming exemption in respect of one house owned and occupied by the assessee for his own residence---Shop was not mentioned in proviso (b) of sub-para. (2) of para. A of Part I of the First Sche4. as to have also been excluded from the application of proviso (a) of sub-para. (2) of para. A of Part I of the First Sched. of the Wealth Tax Act, 1963---Shop had been listed at sub-cl. (2) of cl. (12) of Part I of the Second Sched. to which no proviso or exception had been attached as had been entered under sub-cl. (1) of cl. (12) of Part I of the Second Sched. of Wealth Tax Act, 1963---Assessee should have either opted for availing exclusion of one self-occupied house for basic exemption of Rs.10,00,000 and at the same time, he was also entitled to avail exemption of one shop occupied by him for the purpose of his own business or profession.
Muhammad Suleman, ACIT for Appellant.
Azhar Hussain Sheikh for Respondent.
Date of hearing: 28th July, 1999.
ORDER
SYED MASOOD UL HASAN SHAH (JUDICIAL MEMBER).-- This order will dispose of above wealth tax appeal filed by the department against the order, dated 30-4-1999 passed by the learned, A.A.C. Rawalpindi (hereinafter referred as the impugned order) relating to assessment under section 16(3) of the :Wealth Tax Act, 1963 (hereinafter called the Act) for the assessment year 1998-99.
2. Besides terming the order as bad in law and against the facts of the case, the department has objected to the same on the ground that the A.A.C. was not justified to allow the exemption of Rs.10,00,000 and a self-occupied shop at the same time which was against the spirit of law as the law provided "Self-occupied shop + Self-occupied House or Rs.10,00,000".
3. Hence the above appeal.
4. Briefly the facts are that the assessee an individual filed wealth tax return declaring wealth at Rs.8,27,500 which was revised to Rs.5,27,500. In response to notice, A.R. of the assessee attended the proceedings before the Assessing Officer. The assessee claimed exemption of shop being self -occupied and also statutory exemption of Rs.10,00,000 at the same time which was not allowed by the Assessing Officer. While accepting the declared values of assets like that of 1 Kanal plot, Quarter, Capital, and Cash, the Assessing. Officer estimated the value of House at Choi West at Rs.3,00,000. Besides estimating the value of vehicle at Rs.1,00,000 and then he computed total value of assets at Rs.6,55,000.
5. Feeling aggrieved with the above treatment, the assessee went in appeal before the first appellate forum and the learned first appellate authority vide impugned order while accepting the appeal of the assessee directed the Assessing Officer to follow the provisions and allow the assessee one self-occupied shop + Rs.10,00,000 as provided in clause 12(1)(2) of Schedule II of Wealth Tax Act to the effect that one self-occupied shop + one self-occupied house/Rs.10,00,000 is exempt from the levy of wealth tax.
6. Feeling dissatisfied with the order of the learned first appellate forum, now the department have come to us contesting the same on the grounds enumerated above. .
7. We have heard Mr. Muhammad Suleman, ACIT/DR for the department and Mr. Azhar Hussain Sheikh, Advocate for the assessee.
8. The learned DR, while reiterating the grounds of appeal as. raised by the department, contended that the assessee has exempted for the assessment year under consideration in respect of self-occupied shop as well as basic exemption of Rs.10,00,000, and the order of the Assessing Officer for not allowing basic exemption of Rs.10,00,000 was correct because the assessee could not claim both exemptions at one and the same time.
9. On the other hand, the learned A.R. contended that the order of the learned first appellate forum was legally a right order and the assessee was entitled to the exemption of self-occupied shop as well as the basic exemption of Rs.10,00,000 as provided under the law. He then referred clause (12) of Part I of Second Schedule of the Act and contended that one residential house owned and occupied by the assessee has been excluded from the assets with regard to net wealth of an assessee as per sub-clause (1) of said clause (12) and one shop owned and occupied by the assessee for the purposes of his business has also been excluded as per sub-clause (2) of the said clause. He further contended that the proviso (a) given under sub-paragraph (2) of paragraph A of the First Schedule was not applicable to the assessee exercising option under sub-clause (1) of said clause (12) and further that the provisions of clause (12) relating to the exemption with regard to one shop owned and occupied by an assessee as per sub-clause (2) for the purpose of his own business and one residential House owned and occupied by the assessee as per sub-clause (1) of clause (12) were very clear and provisions of this clause apply to an assessee to whom provisions of sub-para. (2) of paragraph A of Part I of the First Schedule apply. He, while referring to Part I of First Schedule of the Act providing for rates of Wealth Tax, referred to its proviso (b) of sub-para. (2) of paragraph A, contended that the said provision clearly provided that "if any assessee avails of an option under clause (12) of Part I of the Second Schedule to have one house owned and occupied for the purpose of his own residence excluded from his assets, proviso (a) to this sub-paragraph shall not apply". In proviso (a) to sub para. (2) of paragraph A of Part I of the First Schedule, it has been provided that "no tax shall be payable by an assessee on that portion of his net wealth to which this sub-paragraph applies and which does not exceed Rs.10,00,000." Then while referring to sub-clause (3) of clause (12) of Part I of the Second Schedule, the learned A.R. contended that clause (12) was applicable to an assessee to whom provisions of sub-para. (2) of paragraph A of Part I of the First Schedule would apply. By referring the above provisions of law, the learned A.R. tried to support the order of the learned first appellate forum as to have been rightly passed.
10. We have considered the respective contentions of the parties at length and have also gone through the relevant provisions of law as given in Part I of the First Schedule and Part I of the Second Schedule and specifically paragraph A (2)(a) and (b) of Part I of the First Schedule and clause (12) of Part I of the Second Schedule of the Wealth Tax Act, 1963.
11. It is obvious from proviso (a) of sub-para. (2) of paragraph A of Part I of the First Schedule that an assessee has been granted exemption to `the portion of his net wealth to the extent of Rs.10,00,000 and it was further obvious from proviso (b) of sub-para. (2) of paragraph A that the said basic exemption of Rs.10,00,000 was not allowable to an assessee exercising option under clause (12) of Part I of the Second Schedule for his claiming exemption in respect of one house owned and occupied by the assessee for his own residence as to be excluded from his assets. There is no mention of a shop owned and occupied by the assessee for the purpose of his business in the proviso (b) of sub-para. (2) of paragraph A of Part I of the First Schedule as to have also been excluded from the application of proviso (a) of sub para. (2) of paragraph A of Part I of the First Schedule of the Act. Whereas, one shop owned and occupied by the assessee for the purpose of his own business has been listed at sub-clause (2) of clause (12) of Part I of the Second Schedule to which no proviso or exception has been attached as has been entered under sub-clause (1) -of clause (12). Moreover, it has been given in sub-clause (3) of clause (12) of Part I of the Second Schedule of the Act that this clause shall apply to an assessee to whom provisions of sub-para. (2) of paragraph A of Part I of the First Schedule apply.
12. From the above referred provisions of law, it clearly meant that an assessee is entitled to avail exclusion from his assets in respect of one house occupied by him for the purpose of his own residence while exercising option in lieu of exemption limit of Rs.10,00,000. He can, obviously either opt for availing exclusion of one self-occupied house for the purpose of his residence or basic exemption of Rs.10,00,000 from his assets or net wealth as the case may be. At the same, he, is also entitled to avail exclusion/exemption from his assets in respect of one shop occupied by him for the purpose of his own business or profession and this exclusion/exemption is not contingent upon any option as stated above and is not in lieu of exemption limit of Rs.10,00,000.
13. For the foregoing discussion, we agree with the resultant effect of the order of the learned first appellate forum but with our own observations as given above. Therefore, no exception can be taken to the conclusion as arrived at by the learned A.A.C. in the impugned order.
14. Consequently; the departmental appeal fails
C.M.A./M.A.K./48/Tax(Trib.)
Appeal dismissed.