I.T.As. Nos.1398/LB to 1404/LB of 2005, decided on 6th June, 2007. VS I.T.As. Nos.1398/LB to 1404/LB of 2005, decided on 6th June, 2007., 2007 PTD-INCOME-TAX-APPELLATE-TRIBUNAL-PAKISTAN 2091 (2007)

Income Tax Ordinance (XXXI of 1979)---

----S.9---Charge of income tax---Ceasing membership on sale of plot or house---Associated membership fee---Taxation---Amount not returned but stood forfeited in favour of assessee, was income chargeable to tax, however, it was not the entire amount which was received under the head associate membership which could be charged to tax but only such amount in each year shall be included in the income for charging it to tax which is left in the hands of assessee on relinquishing the associate membership by sale of property which took place in each year---Matter was remanded to the Assessing Officer for determining the exact amount which had been forfeited by the assessee or stood surrendered in favour of assessee in each year on their ceasing to be' member on sale of property---Assessing Officer was directed by the Appellate Tribunal to work out and verify from the assessee's record the amount in each year which was to be charged to tax in this manner.

Zia Haider Rizvi for Appellant.

Raja Javed Iqbal, I.A.C: (L.T.U.) for Respondent.

ORDER

The titled appeals are directed against two separate orders but evenly dated as 8-1-2005. All the appeals are disposed of as under--

2. In assessment year 1996-97, the issue of allowability of expenses on proportionate basis has already been resolved by our earlier order dated 10-4-2007 in I.T.As. Nos.1392/LB to 1397/LB of 2005, findings on this issue as recorded earlier will be applicable hereto.

3. The other issue which is common in all the years is in respect of charging to tax the amount received under the head associate membership deposit, in this respect we have heard both the parties and have also perused the available record. We have noticed that everyone who purchases a plot in the society has to become associate member of the Authority, so has to deposit specified amount prior to acquiring a plot or house. Such amount on ceasing to be member due to disposing of properly is not returned and the person who steps in shoes of the out-going associate member, then has to pay again as his own associate membership fees for acquiring property. In such manner the amount which is not returned but stood Forfeited in favour, of the assessee/appellant is retained. The retaining of such amount is Income chargeable to tax in the hands of the assessee/appellant. It is also to be made abundantly clear here that it is not the entire amount which is received under the head associate membership which could be charged to tax but only such amount in each year shall be included in the income for Charging it to tax which in left in the hands of the appellant/assessee on relinquishing the associate membership by sale of property which took place, in each year. So to give effect to such instructions the matter is being remanded to the Assessing Officer for determining the exact amount which has been forfeited by the appellant/assessee or stood surrendered in favour of appellant/assessee in each year on their ceasing to be member on sale of property. The Assessing Officer is directed to work out and verify from the assessee/appellant record the amount in each year which is to be charged to tax in this manner.

4. To contest the disallowing of claim of exemption on support funds and development charges nothing has been submitted as plausible in assessment year 1996-1997 so this ground being devoid of any merit is dismissed.

5. All the appeals are disposed of as above.

M.B.A./88/Tax(Trib)Order accordingly.