Wealth Tax Rules, 1963-------

-----R(3)-Determination of value of constructed property be adopted on "gross annual rental values" basis when the property has not been let out---Principles.

The term and expression GALV as defined in explanation to sub-rule (3) of Rule 8 Wealth Tax Rules, 1963 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 Letting Value" to be the one for which the property might reasonably be expected to be let from time to time. 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."

Commissioner of Income-Tax/Wealth Tax v. Mst. Kamal Asghar 2005 PTD 50 fol.

Mian Yusuf Umar for Petitioner.

ORDER

The question of law claimed in this appeal by the Commissioner of Income Tax/Wealth Tax is as under:--

"Whether in the facts and circumstances of the case, learned ITAT is justified in directing that value of constructed properties be adopted on GALV basis when the property has not been let out."

2. The above question was considered and decided through judgment, dated 18-10-2004 reported as Commissioner of Income-Tax/ Wealth Tax v. Mst. Kamal Asghar (2005 PTD 50) by a Division Bench of this Court of which one of us (Muhammad Sair Ali., J.) was a member. This judgment was thence consistently followed to decide numerous cases. The departmental appeals were dismissed by holding that:--

"(4) After hearing the learned counsel for the Revenue we are of the view that the appeals filed by the Department need to be rejected for the following reasons:--

Firstly, the question 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 the tax payer.

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 Rules. 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."

3. The question of law claimed in the present appeal thus stands settled. In view of the above reproduced reasons and the principle recorded in the above judgment (Commissioner of Income-Tax/Wealth Tax v. Mst. Kamal Asghar), this appeal is dismissed.

M.B.A./C-117/L????????????????????????????????????????????????????????????????????? Appeal dismissed.