KHALIQ DAD RANA VS INCOME TAX APPELLATE TRIBUNAL,LAHORE, 2006 PTD-LAHORE-HIGH-COURT-LAHORE 1523 (2005)

Wealth Tax Act (XV of 1963)---

----S.16(3)---Inherited property---Share of assessee in property as determined by Civil Court in suit for partition after agreement between legal heirs---Held, assessee would not be liable to pay wealth tax in excess of his share as determined by Civil Court.

Muhammad Iqbal Hashim for Appellant.

Muhammad Shahid Jamil Khan for Respondents.

Date of hearing: 13th December, 2(105.

JUDGMENT

MUHAMMAD SAIR ALI, J.---This judgment will govern I.T.A. No. 395 of 1999 to I.T.A. No. 403 of 1999. Although, these appeals pertain to Wealth Tax and should have been allotted a number of W.T.A. but instead the numbers have been allocated as I.T.A. However, the same are being disposed of with the same set of numbers.

2. These nine appeals are filed by the appellant, an assessee having status of individual under the Wealth Tax Act, 1963. In appeals a consolidated order of the Income Tax Appellate Tribunal dated 26-9-1998 is assailed. The appeals pertain to the assessment years 1988-89 to 1996-97 raise a common question of law and have same facts therefore, are being decided through this single order.

3. The question of law raised in all the appeals is:

"Whether on the facts and in circumstances of the case, the Income Tax Appellate Tribunal was justified in subjecting the property situated at 50-Lawrance Road, Lahore to Wealth Tax in the hands of the appellant when a dispute of title' and ownership of this property was subject-matter of litigation in Civil Court between the appellant and the other party?"

4. The question of law is asserted to have arisen from the facts that property of the appellant, noted in the question, was subjected to wealth tax by the Wealth Tax Officer under section 16(3) of the Wealth Tax Act,. 1963. The appellant agitated the order in first appeal and succeeded to get the property deleted from the assessment order. The department went in second appeal against the order of Commissioner Appeals, where learned Accountant Member upheld the order of Commissioner Appeals, however, learned Judicial Member put a dissenting note with observation that the property in question was inherited by the appellant, therefore, ownership of the property was not in dispute before the Civil Court rather appellant had filed the suit for partition. Upon split decision, the matter was referred to Third Member who agreed with Judicial Member on the point that in all the relevant assessment years the property was in the ownership of the appellant, hence, was liable to be included in his net wealth for the purpose of levying wealth tax. The fact alone that property was not in possession of the appellant could not get the appellant out of the mischief of the provisions of law. On facts, he also recorded concession of the Assessee's representative.

5. Confronted with the finding of learned Third Member, the counsel for the appellant had nothing to say except taking an alternative plea that the appellant could not be charged to tax in excess of his share in the property, which is by now determined in the Civil Court. He referred to an agreement amongst the appellant and other legal heirs, where dispute of share in the property was resolved before a Referee appointed by Civil Court. Copy of the report by the Referee dated 24-6-1999, bearing signature of the appellant in agreement, is available on the Court file as annexure to the appeals. Learned counsel for the Revenue, when asked, readily agreed on the point that the appellant should not be charged to tax on the property, more than his share as determined by the Civil Court on submission of the said agreement.

6. In view of the statements of both the learned counsel and without dilating upon the merits of the case, we remand all the appeals with direction to amend the assessment order and charge wealth tax on the property of the appellant only to the extent of his share in the B property as determined in the Civil Court, after the agreement reached between the appellant and other legal heirs on respective shares in the property. In terms of the directions given, the appeals are disposed of.

S.A.K./K-221LCase remanded.