COMMISSIONER OF INCOME-TAX AND WEALTH TAX, PESHAWAR VS Haji MASOOD-UR-REHMAN, 2006 PTD-SUPREME-COURT 1473 (2005)

(On appeal from the judgment, dated 23-12-2003, passed by the Peshawar High Court, Peshawar, in S.A.Os. Nos. 16 of 2002, 17 of 2002, 18 of 2002, 19 of 2002, 20 of 2002, 21 of 2002, 22 of 2002, 23 of 2002, 24 of 2002 and 29 of 2002).

Wealth Tax Rules, 1963---

----R. 8(3)---Constitution of Pakistan (1973), Art.185(3)---Value of building or vacant plot, determination of---Methodology---Appellate Tribunal's view was that such assessment would be made with due regard to nature and size of property, amenities available and price prevailing for similar property in same locality or in neighbourhood of same locality---Revenue alleged such view of the Tribunal was contrary to provisions of R.8(3) of Wealth Tax Rules, 1963 as exception to such Rule was provided in Provisos 1 and 2 of Wealth Tax Rules, 1963---Supreme Court granted leave to appeal to consider such points raised by Revenue. 1999 PTD (Trib.) 394 ref.

Makhdoom Ali Khan, Attorney-General, Raja Muhammad Irshad, D.A.-G. and Raja Abdul Ghafoor, Advocate-on-Record for Petitioners.

Nemo for Respondent.

ORDER

IFTIKHAR MUHAMMAD CHAUDHRY, C.J.--- The petitioner has prayed for leave to appeal against judgment 23rd December, 2003, of the Peshawar High Court, Peshawar.

2. Relevant para. therefrom is reproduced below:

"We have gone through the relevant provision. Rule 8(3) provides a methodology/scheme as to how buildings or vacant sites are to be assessed for the purpose of wealth tax. The plain reading of the said rule along with first proviso leave nothing in doubt to be debated upon and the view taken by the L.I.T.A.T. is perfectly in accord with law and rules. It has followed the same in its true letter and spirit and has rightly perceived the true intent and object of the law. As no provision of law has been violated by the L.I.T.A.T. (Peshawar Camp), therefore, after due consideration of all the facts and after reading the provision of law we are of the firm view that no exception can be taken to the view taken by the' L.I.T.A.T. thus, the question is answered in the affirmative and the impugned judgment is maintained. All these appeals are accordingly dismissed."

A perusal of the above paragraph indicates that learned High Court had relied upon a judgment of Income Tax Appellate Tribunal, decided by it in 1999 PTD (Trib.) 394, according to which following guide-lines have been provided for assessment of value of immovable property:

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(i) The first important and necessary step is to determine the market value of property, whether it is an open plot or a constructed property (building).

(ii) Thereafter, in the case of a building the value is to be determined on the basis of gross annual rental value as laid down in the first proviso to the said rule.

(iii) The lower of the two values, determined is to be adopted for wealth tax purposes.

(iv) In the case of an open plot of land also the market value is first, to be determined. Thereafter, the valuation is to be determined as per the provisions' of the first proviso, if applicable

(v) The lower of the two values is to be adopted. Valuation of immovable property without first determining its market value is not permissible.

3. The learned Attorney-General relying upon sub-rule (3) of Rule 8 of the Wealth Tax Rules, 1963, stated that criteria laid down by the Tribunal in the above case is contrary to the provisions of Rules because according to it the assessment has to be made "with due regard to the nature and size of the property, amenities available and price prevailing for similar property in the same locality or in the neighbourhood of the said locality". It is further stated that exception to these Rules has been provided in provisos 1 and 2 attached thereto. On having taking into consideration the arguments put forth by learned Attorney-General relevant law on the subject as well as the impugned judgment, we are inclined to grant leave to appeal to examine, inter alia, the points so raised by him.

4. The office is directed to prepare appeals arising out of the listed petitions on the same record with liberty to the parties to file additional documents, if need be. Appeals be fixed for hearing during fortnight commencing 13th February, 2006.

S.A.K./C-5/SCLeave granted.