2002 PLP (Trib (PTD)

3. The assessee filed returns of wealth declaring net wealth at Rs.29,19,500 and Rs.18,49,650 respectively and also declared agricultural assets at Rs.15,000 for the above years. In Form AGRW she declared land referred to above, as agricultural land. The Assessing Officer, in view of entries in Form VII of Sindh Revenue Department, observed that the land, on the request of the assessee, has been converted as non‑agricultural vide order, dated 18‑7‑1995 passed by the Mukhtiarkar, Central Karachi, confronted the assessee and called upon her to explain why the plots should not be valued as residential plots.

4. The assessee in reply thereof, contended that mere entry is Form VII is insufficient to treat the land as residential, because it is the beginning of process of converting an agricultural plot into `Sikni' and that many other steps are yet to be followed before the conversion i.e. the land has to be surveyed and demarcated and after physical survey, entries are to be recorded in Gat‑Wadh Form by the Revenue Department showing the exact area available for residential use and later on the land is allotted a specific. plot number by the concerned department other than the Revenue after payment of conversion fee and other dues.

5. The learned Assessing Officer disagreed with the contention of the assessee and valued the plots separately at Collector's rate observing that entries have been made in Form VII, there is no evidence that land is being used for agricultural purposes, matter had been before the Honourable High Court where the dispute was settled through mutual agreement which shows that Land Survey No.66, measuring 6 acres has been described as plots bearing Nos.F‑34 to F‑37, Block‑B, North Nazimabad, Karachi.

6. The learned CIT(A) allowed the appeal whereby deleted the addition observing that estimated value of this agricultural land at Collector's rate at Rs.97,23,143 and Rs.97,23,143 for two relevant assessment years, is illegal.

7. We have heard the learned representatives of the two parties. The learned D.R. argued that the learned CIT(A) was not justified to hold that the plot of land bearing No.201, (Old No.66), Deh Khari Lakhi, North Nazimabad, Karachi, measuring 2 acres be treated as agricultural plot as in the vicinity, all other plots are either residential or commercial, there is no agricultural area available in North Nazimabad, for decades together, no crop has been cultivated, and all around the disputed area, there are residential bungalows. He added that KDA has also issued NOC in 1995 vide letter, dated 21‑8‑1995 which proves that on the valuation date, the disputed land was not agricultural in nature, and had been converted into residential/Sikni.

8. No doubt that North Nazimabad is a thickly populated residential area surrounded by bungalows, the Mukhtiarkar has recorded entries to convert the agricultural land into non‑agricultural/Sikni, vide order, dated 18‑7‑1995 in pursuance of the order passed by the learned Deputy Commissioner on the request of the assessee, but the entry recorded by the Mukhtiarkar in Form VII is nothing to do with the status of the land being residential, industrial or commercial. Mukhtiarkar or Deputy Commissioner in the capacity of Deputy Collector, has no legal authority in this respect within the ambit of Land Revenue Act. A separate process is to be followed under 'a separate provision of law for conversion of any land into residential, industrial or commercial. The status of the land cannot be determined on the basis of Form VII and entry made in BF‑11 of the Deb. Record further reveals that other steps necessary for conversion were still in process, demarcation was to be carried out to determine the actual area and its exact location. Physical surevy was also in the process, thus there exists no possibility for change of status of plot at the relevant time. Admittedly in the litigation before the High Court, entire area measuring 6 acres has been assigned separate plot numbers. However, Revenue record was silent in this respect, and no such order or sanction was available on record till that time.

9. In fact the Assessing Officer failed to distinguish the terms `Sikni' and `residential'.' Revenue Authorities could convert agricultural land into Sikni but have no powers to convert the Sikni land as residential, commercial or industrial. Entries in record of rights/ Form VII or Form II simply recorded for the purposes of maintaining a record and would not be sufficient to declare or charge the status, of the land as residential. It is worth mentioning that payment for conversion of land has been made on 17‑7‑1997 in the head outer development charges of land which shows that till that time process was incomplete.

10. In view of the facts supra, we find reasons to maintain the order of the learned CIT(A) who has been pleased to delete the addition made due to valuation of land at Collector's rate.

11. The wealth tax appeals are disposed of to the extent and in the manner indicated above. C.M.A./M.A.K./221/Tax(Trib.) Appeal disposed of.