W.T.As. Nos. 1473/LB, 1474/LB, 1 of 2001 and 1250/LB of 2000, decided on 6th May, 2002. VS W.T.As. Nos. 1473/LB, 1474/LB, 1 of 2001 and 1250/LB of 2000, decided on 6th May, 2002.
2002 P T D (Trib.) 2755
[Income‑tax Appellate Tribunal Pakistan]
Before Syed Nadeern Saqlain, Judicial Member and Amjad Ali RUnjhu, Accountant Member
W.T.As. Nos. 1473/LB, 1474/LB, 1of 2001 and 1250/LB of 2000, decided on 06/05/2002.
(a) Wealth tax‑‑‑‑‑‑‑ Cancellation of assessment‑‑‑Validity‑‑‑Cancellation of an assessment cannot be approved if the same was cancelled on the basis of a judgment, which was subsequent to the date of framing of the assessment order.
2000 PTD (Trib.) 2133 ref.
(b) Wealth Tax Act (XV of 1963)‑‑‑‑‑‑‑S.17B & Second Sched.Cl. 12(2)‑‑‑‑Power of Inspecting Assistant Commissioner to revise Wealth Tax Officer's order‑‑‑Exemption‑‑‑Car show room‑‑‑ Assessment allowing exemption to car show room was cancelled by the Inspecting Assistant Commissioner under S.17B of the Wealth Tax Act, 1963‑‑‑Validity‑‑‑Car show room could be equated with the term 'shop' as postulated by Cl. 12(2) of the Second Sched. of the Wealth Tax Act, 1963 for the reason that merchandise which was kept there for sale were cars and people came over there to purchase the same‑‑‑Not the‑size of merchandize which had been offered for sale but was to be seen whether activity of sale/purchase as understood in 'common parlance was conducted at the place in order to determine whether it was to be treated a shop‑‑‑Places which have been excluded from the definition of shop was motor workshops and nor car show rooms‑‑‑Order passed under S. 17B of the Wealth Tax Act, 1963 was vacated and flee assessment orders passed by, the Assessing Officer allowing exemption to the assessee was restored by the Tribunal.
W.T.As. Nos. 1288,LB, 1437/LB and 1438/LB of 2001 rel.
(c) Wealth Tax Act (XV of 1963)‑‑‑
‑‑‑‑Second Sched., Cl .12(1)‑‑‑Exemption‑‑‑House‑‑‑Department contested the finding of the First Appellate Authority allowing exemption of one self‑occupied house in lieu of statutory relief i.e. Rs.10,00,000‑‑ Validity‑‑‑Finding of First Appellate Authority allowing exemption to the assessee regarding the house on basis of being self‑occupied‑‑‑Tribunal did not call for any interference, since value of the subject property was adopted at Rs.10,00,000 in the preceding assessment year, the Assessing Officer had given no reason for enhancing the value of the property to Rs.12,50,000‑‑‑Even otherwise, the property was under self‑occupation of the assessee and he was entitled to have exemption under the law.
Zafar Dar for Appellant/Assessee..
Mehboob Alam, D. R. for Respondent/Department.
Date of hearing: 12th January, 2002.
ORDER
SYED NADEEM SAQLAIN (JUDICIAL MEMBER).‑‑‑The titled appeals for the assessment years 1996‑97, 1997‑98 and 1998‑99 bearing W.T.As. Nos. 1473, 1474 and 1354/LB of 2001 have been filed at the instance of the assessee assailing two serparate orders dated 30‑6‑2001 and 16‑6‑2001 passed by the learned IAC Wealth Tax under section 17‑B of the Wealth Tax Act, 1963 (hereinafter called Act). The assessee has also challenged the impugned order dated 28‑4‑2000 through W.T.A. No.1250/LB of 2000 (Assessment year 1998‑99) passed by the learned CWT (A), wherein the learned First Appellate Authority rejected the claim of the assessee with regard to allowing partial exemption of the shop/car show room. The Department is also in appeal for the assessment year 1998‑99 through W.T.A. No. 1495/LB/2000 whereby the Department has contested the finding of the learned First Appellate Authority dated 28‑4‑2000 allowing exemption of one self‑occupied house in lieu of statutory relief i.e. Rs. 10,00,000. Since issue involved in the assessee's appeals for all the years i.e. 1996‑97, 1997‑98, and 1998‑99 is identical, we intend to dispose of the same by this consolidated order:
Assessee's Appeal (under section 17‑B) 1996‑97, 1997‑98 and 1998‑99:
2. Briefly stated the‑ facts of the instant case are that the assessee being owner of a Car Show Room of 5‑Queens Road, Lahore measuring 13 marlas claimed exemption in respect of the same since as per his assertion it fell within the definition of shop. The Assessing Officer allowed the exemption conceding to the contention of the assesee. However, the learned IAC considered the assessment framed under section 16(3) of the Act to be erroneous as well as prejudicial to the interest of Revenue for the reason that the Assessing Officer erroneously allowed exemption on show room from the levy of Wealth Tax Act. The assessee is in appeal before us contesting the impugned findings of the learned IAC.
3. Both the parties have been heard and relevant orders perused. The learned A.R. while making submission at the bar raised preliminary objection with regard to the order passed by the learned IAC for the assessment years 1996‑97 and 1997‑.98. He contended that the learned IAC passed an ex parte order on a single default of the assessee. Service of notice was also challenged by learned A.R. for the assessee, submitting that the assessee has been deprived of proper opportunity of being heard. As regards assessment year 1998‑99 the learned A.R. also raised a preliminary objection that order passed by the Assessing Officer had already been merged with the learned CIT (A)'s order which was passed on 28‑4‑2000, and the learned IAC through his subsequent order dated 16‑6‑2001 could not re‑open the same. However, the main thrust of the arguments revolved around the issue of allowing exemption under clause 12(2) of the Second Schedule in respect of car show room bringing it within the definition of "shop". It was argued by the learned A.R. that the learned IAC relied on Tribunal's judgment reported as 2000 PTD (Trib.) 2133. He contended that Hon'ble superior Courts have disapproved cancellation of an assessment on the basis of judgment, which was subsequent to the date of order. He brought to our notice that assessment in the instant case was framed under section 16(3) of the Act on 17‑4‑1998, but the judgment relied upon by the learned IAC was announced on 31‑12:1999, which was as 2000 PTD (Trib.) 2133.
4. On merit, it was submitted by the learned A. R. that assessee is involved in the business of the sale of cars, and since the merchandise offered for sale are cars, the assessee would require greater space, irrespective of the nature and size of the place that is to be treated a shop for the purposes of clause 12(2) to the Second Schedule of the Act.
5. The learned D. R. has controverted the arguments advanced‑ by the learned A.R. and supported the impugned order passed by the learned IAC.
6. We have given our anxious consideration to the submission made at the bar by the learned counsel for both the, parties, we find ourselves in full agreement with the arguments advanced by the learned A. R.
7. As regards first contention of the learned A.R. that the learned IAC erred while relying upon a judgment of the Tribunal, in order to invoke section 17‑B, it is manifestly clear that judgment of the tribunal from which the learned IAC sought strength was not in the field at the time of framing of assessment order. It has been held time and again by the superior Courts of Pakistan that cancellation of an assessment cannot be approved if the same is cancelled on the basis of a judgment which was subsequent to the date of framing assessment order.
8. Second contention urged at the bar by the learned A.R. was that car show room was covered by the definition of "shop" as envisaged in clause 12(2) of the Second Schedule to the Wealth Tax Act.
9. This issue that whether car show room comes within the definition of shop also came up for adjudication before the Tribunal. The Tribunal vide order dated 11‑8‑2001 passed in W.T.A. No. 1288/LB of 2000, W.T.A. No. 1437/LB of 2001, W.T.A. No. 1438/LB of 2001 (Assessment years 1997‑98, 1998‑99 and 1999‑2000) held that car show room could be equated with the term `shop' as postulated by clause 12(2) of the Second Schedule of the Act for the obvious reason that merchandise which is kept there for sale are cars and people come over there to purchase the same. It is not the size of merchandise which has been offered for sale but is to be seen whether activity of sale/purchase as understood in common parlance is conducted at the place to determine whether it is to be treated a shop. It also is worth‑mentioning that the Tribunal while adjudication in Wealth Tax Appeals Nos. 1288, 1437 and 1438/LB/2001 did refer to its earlier supra judgment which has been relied upon by the learned IAC while invoking section 17‑B of the Act and it was categorically observed that places which have been excluded from the definition of shop was motor, workshops and not car show room wherein, too, order of the IAC was cancelled while order passed by the Assessing Officer whereby he allowed exemption to a car show room treating it a shop was restored. In this view of the matter we have no doubt in our mind that the judgment of the Tribunal passed in W.T.As. Nos. 1288, 1437 and 1438/LB of 2001 is 'applicable on all fours to the case of the assessee.
10. For the foregoing reasons the order passed under section 17B is vacated and the assessment orders passed by the Assessing Officer allowing exemption to 'the assessee is restored. Assessee's appeal accepted.
Departmental appeal:
11. As regards departmental appeal impugning the findings of learned CIT (A) allowing exemption to the assessee regarding the house on basis of being self‑occupied, we are of the considered view that impugned order does not call for ant interference. Since value of the subject property was adopted at Rs.10,00;000 in the preceding assessment veer, the Assessing Officer has given no reason for enhancing the value of the property to Rs.12.50,000. Even otherwise, as observed by the learned CIT (A), the property is under self occupation of the assessee. Hence he is entitled to have exemption under; the law.
12. In this view of the matter the departmental appeal being devoid of any merit stands dismissed.
C.M.A./M.A.K./422/Tax(Trib.) Assessee's appeal accepted.