Finance Act (XII of 1991)‑‑‑

‑‑‑‑S. 12‑‑‑Corporate Assets Tax‑‑‑Work in progress ‑‑‑Taxability‑‑ Appellate Tribunal directed the Assessing Officer to charge Corporate Assets Tax on the work in progress after obtaining the details of assets from the assessee.

D.C.I.T. v. Messrs Fatima Enterprises, Multan I.T.A.T. No. 897/LB of 1998 ref.

Tahir Yazdani for Appellant.

Anwar, Ali Shah, D.R. for Respondent.

Date of hearing: 4th December, 2001

ORDER

KHAWAJA EAROOQ SAEED (JUDICIAL MEMBER).‑‑‑These are cross‑appeals except for LT.A No.3286 for the assessment year 1992‑93 which is on the issue of CAT. Additions in Profit and Loss expenses is contested by the assessee while the Department is against partial modification and deletion by the CIT.

The assessee argument in support of his claim is that the add backs are not maintainable. Further, in the support of his claim is that the add‑backs are not maintainable. Further, in the presence of acceptance of Trading Account, there is no justification in partial modification in the P&L. The maintenance of accounts in the case of P&L is on the same fashion on which the Trading account has been prepared, everything he remarked is vouched and verifiable and Assessing Officer failed to found or pin‑point any discrepancy therein.

On the other hand the learned D.R. said that a notice under section 62 was issued, assessee in reply whereof could not satisfy the Assessing Officer hence add‑backs were made. He, therefore; urged the restoration of the relief allowed by the CIT. We confronted this matter to learned A.R. who repeated that the add‑backs are not maintainable for want of specific defects in the accounts of the assessed. He, however, could not either produce the notice under section 62 of reply in compliance thereto.

On the other hand the learned D.R. was without record besides departmental grounds are vague. We, therefore, cannot subscribe in views of either of them. In this regard the judgment mentioned by learned A.R. in support 13f his contention that where Trading accounts are accepted stronger responsibility costs over the shoulder of the Department is also ignored. In this case not only that the assessee had a history of add‑backs but also a. notice under section 62 has been issued. Furthermore, the Tribunal has set aside the case on the issue of add backs in some earlier years but have not given any specific relief. This order, therefore, is of no help to the assessee as facts therein are not applicable on all fours on this case. As a result we consider all the appeals filed by the assessed as well as by the Department to be of no help and same are dismissed.

Regarding departmental appeal on the issue of CAT this Tribunal has already held in a number of cases including Full Bench judgment in the case of Fatima Enterprises, Multan that capital work in progress is a part of fixed assets. In this regard the finding of the CIT who has excluded the capital in work in progress Rs. 4,37,51,897 cannot be supported. As already referred by us, this Tribunal in a number of cases decided this issue but, however, we would mention ITAT No.897/LB of 1998, decided on 30‑11‑1999, in the case of DCIT v. Messrs Fatima Enterprises, Multan; wherein the ratio decidendi is as follows:

"As a result the order of the CIT(A) in the case of Fatima Enterprises is cancelled and of the ITO is restored. Similarly the finding of the CIT(A) in the case of Zahoor Cotton Mills that work in progress is fully covered by the term `Fixed Assets' as used in Capital Assets Tax for charging tax under section 12(18) read with section 12(12)(d), is fully justified. The same is hereby confirmed."

The A.R. was asked to furnish the detail of fixed assets, which he failed. It may be worth‑mentioning here that since no appeal or revision lies against the order .of the ITAT in the case of CAT the order has attained finality. So, there cannot be any doubt any more that these assets cannot be charged to capital assets.

Regarding our observation, we would refer section 12(10) of CAT that speaks as follows:‑‑

"(10). The provisions of sections 23; 24, 25 and 3_5 of the Wealth Tax Act, 1963 (XV of 1963), shall, so far as maybe, apply to an appeal against; or revision of rectification of an order under this section as they apply to an appeal, revision of rectification under this said Act.

The above section 12(10) of the Finance Act, 1991 the provisions of which have been protected does not include sections 27 and 29 of the Wealth Tax which specifically deal with appeal to High Court and appeal to Supreme Court. We, therefore, do not have an;, option but to follow the ratio of the judgment of the ITAT and direct the Assessing Officer to charge CAT on the work in progress‑. However, he shall obtain the details from the assessee and recalculate amount following the parameter fixed in aforementioned Full Bench judgment.

C. M.A./231/Tax(Trib.)

Order accordingly.