2006 PLP (Trib (PTD)

KHAWAJA FAROOQ SAEED (CHAIRPERSON).

This appeal A has been filed by the assessee. It is against the addition of Rs.2,97,500 made under section 13(1)(aa). The said addition has been confirmed by the first appellate authority.

2. Brief facts leading to this appeal are that the assessee purchased a Car on 26-2-1995. Later, he opted to file a Declaration under section 59-D under Tax Amnesty Scheme, 1997 through which the aforementioned Car was declared by the assessee. The cost of the Car was Rs.2,97,

500. However, the assessee declared its depreciated value upto 30-6-1997 which was Rs.2,16,

877. The Assessing Officer did not C accept the Declaration for the reason that the tax fell short by Rs.6,016.

3. The A.R. claims that the same was illegal and unjustified as the value under the Scheme of Undisclosed Income under section S9-D of C.B.R.'s Circular No.7 of 1997 was to be made in accordance with the Rules contained in Part-IIA of the Income Tax Rules. He said that as per said rules, the value of a car was to be determined as per Para. 3 of Part-IIA of the Income Tax Rules, 1982. In his opinion, the declaration having been made in respect of the value as on 30-6-1997, the assessee was entitled to the depreciation and the tax was to be paid on the depreciated value. He vehemently insisted. that as per Sub-para (c) of Para 21C, the value computed should have been reduced by a sum equal to 10% of the said value for each successive year. It was brought to his notice that the said provisions deal with the condition and the value of the assets for the purpose of the Scheme is to be dealt with in Para. 2 of C.B.R.'s Circular No.7 of 1997. The said para defines Undisclosed Income. The same speaks as follows: "(2) Meaning of Undisclosed Income.

For the purposes of this scheme "undisclosed income" shall mean any income (including any investment to be deemed as income under section 13 of the Income Tax Ordinance, 1979 or any other deemed income) for any year or years relevant to any assessment year or years ending on or before the 30th day of June, 1997, which was chargeable to tax but was not so charged".

4. As is apparent from the above para, the undisclosed income which is allowed to be declared means any income for any year or years relevant to any assessment ending on or before 30th June, 1997. It means that whosoever have made some investment and the same is not disclosed, he may declare the same either for 30-6-1997, 30-6-1996, 30-6-1995 and earlier in the same fashion. The valuation mentioned by the learned A.R. before me is not the valuation of the amount of declaration. This valuation is only for the purpose of bringing the said amount, property or immovable assets in terms of cars etc. in the books. For example, take the case of this assessee, his undisclosed income relates to the year ended on 30-6-1995 and the same amounts to Rs.297,

500. It is this amount which he is supposed to declare and on which 7.5% tax was payable by him. Later, if the said amount is to be made as a part of the balance sheet of some business etc. the value of the same shall be taken by allowing depreciation in each year as per Part-IIA of the Income Tax Rules, 1982. The declaration shall, however, be of the total investment and not of the depreciated value as on 30-6-1997. The interpretation of the A.R. is, therefore, misconceived.

5. The alternative argument of the learned A.R. is, however, valid. The Assessing Officer at best could make the addition up to the amount which was not covered within the tax paid by the assessee. Rather he should have created a demand of the balance amount of Rs.6,016 and should have charged additional tax for delay. I, therefore, direct for the acceptance of the Declaration under section 59-D, however, subject to payment of the balance tax of Rs.6,016. from the principal amount and/or additional tax for delay in payment as per law. The appeal stands decided accordingly. C.M.A./549/Tax(Trib.)???????????????????????????????????????????????????????????? Order accordingly.