2002 PLP (Trib (PTD)
N/A
| Citation | 2002 PLP (Trib (PTD) |
| Forum / Court | Income-tax Appellate Tribunal Pakistan |
| Bench Members | Muhammad Sharif Chaudhry, Accountant Member and Muhammad Tauqir Afzal Malik, Judicial Member |
| Parties | N/A |
| Primary Law | (b) Wealth Tax Rules, 1963, (a) Wealth Tax Rules, 1963 |
Q1: What are the key laws and sections cited in 2002 PLP (Trib (PTD)?
This judgment primarily cites: (b) Wealth Tax Rules, 1963, (a) Wealth Tax Rules, 1963 as referenced in Pakistani case law index.
Q2: Which judicial bench decided the case 2002 PLP (Trib (PTD)?
The case was heard and decided by the Income-tax Appellate Tribunal Pakistan bench comprising: Muhammad Sharif Chaudhry, Accountant Member and Muhammad Tauqir Afzal Malik, Judicial Member.
Q3: What is the official citation format for this judgment on Pakistan Law Portal?
Cite this legal precedent as: 2002 PLP (Trib (PTD) (N/A). Read the full summary and cross-referenced laws free on Pakistan Law Portal.
Laws Cited
Representation
- Shahid Zaheer, D.R. for Appellant.
- Shahid Abbas for Respondent.
- Date of hearing: 20th June, 2001.
Headnotes / Summary
R.8(3)
Determination of value of land and building with fixtures and fittings
Rule 8(3) of the Wealth Tax Rules. 1963 prescribes the method for determination of value of lands and buildings and in assessing value of lands and buildings under the said Rule, only the rent charged for land and building could be taken into consideration and not the rent charged for fixtures and fittings
Only one exception to the said Rule was the case where fixtures and fittings were an integral part of the land and building and rent charged for the same could not be separated from the rent of the building
Assesses, in the present case was charging separate rent for fixtures and fittings and the same had been provided in the lease agreement itself
List of accessories had been produced and from a glance at the list one could easily see that these accessories or fittings were not integral part of the building and were separable from, the .same
Rent charged for fixtures and fittings could not, in circumstances, be clubbed with the rent of the building for computation of value of assessee's property on the basis of ALV under R.8(3) of the Wealth Tax Rules, 1963.
R. 8(3)
Valuation of fixtures and fittings
Determination-- Connivance of lessor with lessee
Effect
Items of fittings, value of which had been declared at Rs. 1,25,000 could not obviously fetch a rent of Rs. 1,20,000 in a year
Rent of these items, according to a fair and independent assessment, could not be more than Rs. 3,000 per month in any case
Allegation of the Department that rent had been allocated in the agreement deed with connivance of the lessee obviously could not be ruled out in circumstances.
Judgment & Decree
Tube lights 30 - (3) Carpets 10' x 14' 04 - (4) Exhaust Fans 09 - (5) Geaser 02 - (6) Wooden Almirah 08 - (7) Wooden Cabinet 03 - The value of the abovementioned items has been declared at Rs. 1,25,
000. The lease deed shows that a rent of Rs. 10,000 is being charged for the abovementioned fittings whereas rent for the building is being charged at Rs. 15,000 per month. The building of the house has been constructed on a plot measuring 2 Kanals in the most posh locality of Lahore, namely LCCHS or popularly called Defence. The building as per lease agreement consists of 3 bed rooms with attached bathrooms, 1 T.V. lounge, 1 kitchen-cum-pantry, 1 powder room, 2 box rooms, 1 servant quarter with bathroom and 1 room for garden and car accessories on the ground floor. There are, on the first floor, 3 bed rooms with attached bathrooms, 1 box room, 1 T.V. lounge and 1 kitchenette. From the position of the land and building of the house and from the list of the items of fixtures and fittings, the allocation of rent in the lease agreement to the building and to the fittings appears to be just unfair rather ridiculous. The items of fittings whose value has been declared -by the assessee herself at Rs. 1,25,000 cannot obviously fetch in a rent of Rs. 1,20,000 in a year. According to a fair and independent assessment, the rent of these items cannot be more than Rs. 3,000 per month in any B case. Thus the allegation of the learned DR that rent has been allocated in the agreement deed with connivance of the lessee obviously cannot be ruled out.
8. In view of the foregoing discussion, the assessment orders of the WTO and the impugned appellate order of the learned Commissioner are vacated. It would be most appropriate and fair if 90% of the total rent of assessee's immovable property is allocated to building and 10% of the total rent is allocated to fittings and fixtures. The Assessing Officer is directed to make valuation of the building on the basis of ALV as determined above. The value of fittings and fixtures as declared by the assessee should be accepted and added to the value of building so determined. In this manner, the total value of assessee's said immovable property may be assessed.
9. No separate addition on account of security should be made. In the year 1995-96, addition in ALV may be made as per clause `2' of the lease agreement.
10. Consequently, appeals filed by both the parties stand decided in the manner indicated above. C.M.A./M.A.K./144/Tax (Trib.) Order accordingly.