COMMISSIONER OF WEALTH TAX, ZONE-B, LAHORE VS Mrs. TEHMEENA AKEEL
2005 P T D 2458
[Lahore High Court]
Before Nasim Sikandar and Jawwad S. Khawaja, JJ
COMMISSIONER OF WEALTH TAX, ZONE-B, LAHORE
Versus
Mrs. TEHMEENA AKEEL
W.T.A. No. 38 of 1997, heard on /01/.
th
March, 2005. Wealth Tax Rules, 1963---
----R.8(3)---Wealth Tax Act (XV of 1963), S.27---Stamp Act (II of 1899), S.27-A----C.B.R. Circular No.7 of 1994 dated 10-7-1994---Valuation of land and building---Determination---Principles---Departmental appeal to High Court---Questions stated to have arisen out of the impugned order of the Tribunal were whether the valuation made by the duly appointed valuer was admitted fact on the part of the assessee; whether in the presence of the valuation as admitted fact the Assessing Officer could adopt the value other than the value fixed by the District Collector and whether the Assessing Officer was bound to obey the Circular, issued by C.B.R. in a case where the market price was referred by the assessee as admitted fact and the same value was .determined by the qualified valuer---Held, question as framed for appeal to the High Court could not. be said to have arisen out of the order of the Tribunal inasmuch as it was neither contended nor argued before the Tribunal that the properties in respect of which the valuations were determined by the Assessing Officer were not let out---Revenue had not been able to point out any provision of law or any precedent in support of separate valuation of cost of construction and land for the purpose of assigning of value to a. property---Tribunal was correct in pointing out that the only method provided by law in such cases was R.8.(3) of the Wealth Tax Rules, 1963; Central Board of Revenue's Circular No.7 of 1994 dated 10-7-1994 could not hold good as against R.8(3), Wealth Tax Rules, 1963, any instruction by any administrative authority against the provisions of law or the Rules framed thereunder could not be employed to defeat the law or the procedure to the deteriment of the rights of the taxpayer and no administrative instructions could be issued to an Assessing Officer while he was performing quasi-judicial 'function of making assessment---Any such administrative instructions in the field, therefore, were not binding upon the Assessing Officer and term and expression GALV as defined in explanation to R.8(3), by itself, implied that it was not necessary for a building or property to have actually been let out for the purpose of application of GALV rule---Said explanation defined the "Gross Annual Rental Value" to be the one for which the property might reasonably be expected to be let out from time to time---Definition itself had indicated that GALV was only a notional value on which a property could reasonably be expected to be let out from year to year---Actual renting out of property for the purpose of application of R.8(3), therefore was not required at all---Appeal of the Revenue dismissed in circumstances.
K. T. Kuruvilla v. District Valuation Officer and another. 2001 PTD 848 = 241 ITR 691 not applicable.
Mian Yousaf Umer for Appellant.
Nemo for Respondent.
Date of hearing: 8th March, 2005.
JUDGMENT
NASIM SIKANDAR, J.---In this departmental appeal following questions proposing interpretation of Rule 8(3) of the Wealth Tax Rules, 1963 are stated to have arisen out of the impugned order of the Income Tax Appellate Tribunal, Lahore Bench, Lahore:--
"(i) Whether the valuation made by the duly appointed valuer is admitted fact on the part of the respondent?
(ii) Whether in the presence of the valuation as admitted fact the Assessing Officer can adopt the value other than the value fixed by the District Collector?
(iii) Whether the Assessing Officer is bound or not to obey the Circular issued by the C.B.R. in a case where the market price is referred by the respondent as admitted fact and the same value was determined by the qualified valuer?"
2. The respondent in this departmental appeal, at the relevant time, was assessed to wealth tax. She filed her wealth tax return indicating different value for the movable as well as immovable properties owned by her. The Assessing Officer after discarding the declared value of property proceeded to determine its value by clubbing the cost of construction and the value of land as determined/fixed from time to time by the District Collector concerned under section 27-A of the Stamp Act, 1899.
3. The assessee succeeded in first appeal while the departmental appeal against the first appellate order was dismissed. Learned Tribunal disapproved separate determination of valuation of land and cost of construction of the property declared by the assessee with reference to one of their earlier decisions. The Tribunal directed that the method of valuation wider Rule 8(3) of the late Wealth Tax Rules, 1963 should be adopted.
4. On consideration of the statements of the case in the perspective of the aforesaid proposed questions of law we are of the view that the appeal filed by the Department needs to be rejected for the following reasons:--
Firstly, the questions as framed cannot be said to have arisen out of the order of the Tribunal inasmuch as it was never contended nor argued before the Tribunal that the properties in respect of which the valuations were determined by the Assessing Officer were not let out.
Secondly, learned counsel for the Revenue has not been able to point out any provision of law, the Wealth Tax Act, 1963, its Rules 1963 or any authoritative pronouncement by a superior Court in support of separate valuation of cost of construction and land for the purpose of assigning of value to a property. Learned Tribunal is correct in pointing out that the only method provided by law in such cases is Rule 8(3) of the said Rules.
Thirdly, as against the provisions of the said rules C.B.R. Circular No.7 of 1994, dated July 10, 1994 cannot hold good. Any instructions by an administrative authority against the express provisions of law or the rules framed thereunder cannot be employed to defeat the law or the procedure to the detriment of the rights of taxpayer. Equally no administrative instructions can be issued to an Assessing Officer while he is performing quasi-judicial function of making assessment. Any such administrative instructions in the field, therefore, not binding upon the Assessing Officer.
Lastly, the term and expression GALV as defined in explanation to sub-rule (3) of Rule 8 by itself implies that it is not necessary for a building or property to have actually been let out for the purpose of application of GALV rule. The said explanation defines "Gross Annual Rental Value" to be the one for which the property might reasonably be expected to be let from time to time. As noted above, the definition itself indicates that GALV is only a notional value on which a property could reasonably be expected to be let from year to year. The actual renting out of property for the purpose of application of the rule, therefore, is not required at all.
5. The case relied upon by the appellant in re: K.T. Kuruvilla v. District Valuation Officer and another (2001 PTD 848) = (241 ITR 691) is not relevant. There is nothing on record to show that in the Indian Wealth Tax Act, 1957 Schedule ITI Rules 3 and 20 there is a provision equivalent to Rule 8(3) of the Wealth Tax Rules, 1963. In absence of a comparable provision in the Wealth Tax Rules 1963 the ratio settled in the judgment from a foreign jurisdiction cannot be made applicable. On the other hand the impugned order of the Tribunal is supported by the clear provisions of Rule 8(3) of the Wealth Tax Rules, 1963.
6. Therefore, this departmental appeal shall be dismissed.
M.B.A./C- 123/LAppeal dismissed.