P L D 1985 Karachi 407 (PLP)

AJMAL MIAN, J.-By this common judgment we intend to dispose of the above 3 petitions as they involve common points of law. The petitioner is a private limited company, incorporated under the Companies Act. It owns a building constructed on 3,100 sq. yds. plot of land at West Wharf, Karachi (hereinafter referred to as `the building') comprising of godowns and offices. The same has been- let out to a number of tenants, the total monthly rent of which is Rs. 1,15,841 i. e. Rs. 13,90,092 per annum. The petitioner was assessed under the Wealth Tax Act, 1963 (hereinafter referred to as `the Act') for the assessment years 1979-80, 1980-81 and 1981-82. They had also received notice for assessment for the assessment year 1982-83, but the petitioner has filed the above three petitions, impugning the levy of Wealth Tax in respect of the above building. It may be observed that the petitioner has also filed appeals against the above 3 assessment orders for the above 3 assessment years, which are pending in the Department. ,

2. In support of the above petitions Mr. Nasim Ahmed Khan, learned counsel for the petitioner has urged as follows : (1) That since in the official Gazette the amendment brought about inter alia in section 4he and sub-clause (e) of section 2 of the Act was made applicable with effect from 28th June 1980, the ,assessment of Wealth Tax for the year 1979-80 on the basis of above amendment is without jurisdiction. (ii) That the petitioner's building does not fill within the ambit of the definition of `assets' given in section 2 (e) of the Act, and, there fore, the levy of wealth tax on it is beyond the scope of the Act. (iii) That factually, the petitioner has not let out the above building but has merely granted licences to the occupants and, therefore, above clause (e) of section 2 of the Act is not applicable. (iv) That the term `letting out' has not been defined in the Act but by virtue of section 2 (s) of the Act, the concept of letting out provided for in section 19 of the Income-tax Ordinance, 1979 can be pressed into service. (v) That the valuation made by respondent No. 1 is in violation of section 7 of the Act and also rule 8 (3) of the Wealth Tax Rules.

3. Since the interpretation of the Act was involved, the notice was issued to the Deputy Attorney-General, in response to which Mr. Sohail Muaaffar, Advocate has appeared. By our order dated 29th November, 1984, we had asked him to produce a photos-tat copy of the original amending Ordinance signed by the the President. In pursuance of the above order, he has produced a photostat copy of the same, which was signed by the President and the Law Secretary, which indicates that in subsection (3) of section 1 the date and year mentioned are 28th day of June 1979 respectively. It seems that in the Gazette this was printed as 28th day of June, 1980. The above mistake was rectified by a Corrigendum, Gazetted on 30th January, 1980 (Annexure `C' to the Petition). However, it has been contended by Mr. Nasim Ahmed Khan, learned counsel for the petitioner that the law is, what appears in the official Gazette and not what was signed by the President. It will suffice to observe that it was merely a printing mistake, which was rectified through the aforesaid Corrigendum. In our view the above original, signed by the President and the Secretary, Ministry of Law reflects the correct version of the Ordinance. Any printing mistake on the part of a clerk cannot nullify the original text of the Ordinance.

4. Adverting to the second contention of Mr. Nasim Ahmed Khan, that the building does not fall within the ambit of clause (e) of section 2 of the Act, it may be observed that it will be pertinent to reproduce the same, which reads as follows : "(e) `assets' includes : (i) in the case of an individual and a Hindu undivided family property of every description movable or immovable except : (a) growing crops, grass or standing trees on agricultural land; and (b) any building owned or occupied by a cultivator or receiver of rent or revenue out of agricultural land Provided that the building is on or in the immediate vicinity of the land and is a building which the cultivator or the receiver of rent or revenue by reason of his connection with the land requires as a dwelling house or a store house or an outhouse ; and (ii) in the case of a firm, an association of persons or a body of individuals, whether incorporated or not, and a Company, immovable property held for the purpose- of the business of construction and sale, or letting out, of property." Before construing the above-quoted clause of section 2 of the Act, it may be pointed out that in the Memorandum and Articles of association of the petitioner company, one of the objects is to own immovable properties and to lease out/let out the same. It is also an admitted position that the petitioner has not been carrying on business in any portion of the building but has their office in Sheikha House, Campbell Street, Karachi. Keeping in view the above factual position if we revert back to the definition of the term 'assets' given in above clause (e) of section 2, we find that sub-clause (ii) of above clause (e) of section 2 the assets include in the cas of a firm or an association of persons or a body of individuals, , whether incorporated or not and a company, an immovable property either for the purpose of business of construction and sale or for letting out. It was urged by Mr. Nasirn Ahmed Khan that in order to attract the above sub-clause (ii), of clause (e) of section 2, it is incumbent that a company should be engaged in the business of construction and sale and letting out. In other words, according to him the words, "held for the purpose of the business of construction and sale" and the term "letting out" appearing in the above clause are to be read conjunctively and not disjunctively. It has, therefore, been further urged by him that if a company is hot engaged in construction and sale of buildings but merely holds a building, and lets out the same, it will not be covered by above clause (ii) of clause of section 2 of the Act. We are unable to subscribe to the above contention. In our view, there is no ambiguity in above sub-clause (ii) of clause (e) of section

2. The above words and the term are to be read disjunctively as the use of a `coma' and the word `or' between the above words and term is not without significance but are employed to manifest that the same are to be read disjunctively. We are inclined to hold that in order to attract above sub-clause (ii) a company should either be engaged in the business of construction and sale of propert or it should let out a property held by it. In the present case, it is an admitted position that the petitioner company holds a building, which has' been let out to a number of tenants and of which the monthly rent asi observed herein above is Rs. 1,15,

841. It may again be pointed out that the petitioner's place of business is in Sheikha House, Cambell Street,! Karachi, and not in the building in question. In this regard reference may, also be made to the case of B. P. Biscuit Factory Ltd., Karachi v. Wealth Tax Officer. Circle II, Karachi ( 1981 P L D 217, in which a Division Bench of this Court while construing the above clause (ii) of clause (e) of section 2 of the Act; held that the use of word "or'' between the words "construction and sale" and "letting out the property" indicates that they are to be read disjunctively.

5. Referring to the learned counsel for the petitioner's contention that the petitioner has not let out any portion of the building, but has granted licences, it may be observed that in order to determine whether a person is a tenant or a licensee of an immovable property belonging to another person one of the criteria is to ascertain, whether he is in exclusive possession and its exclusive user, as a tenant/lessee is entitled to exclusive possession of the property concerned and its exclusive user. In the instant case it is an admitted position that the tenants/lessees have received the exclusive possession of the godowns and offices as the case may be and have been enjoying the same to the exclusion of all including the petitioner. The tenants keep their own locks at the premises, which cannot be touched by the petitioner. Mr. A. A. Dareshani, learned counsel for the respondent has filed a copy of a lease agreement entered into between the petitioner and one of the tenants, namely, Messrs Muhammad Farooq & Co. in C. P. No. 62 of 1984, which indicates that the terms and conditions, are the standard term and conditions of a transaction of lease/tenancy and not of a licence.

6. As regards the above fourth contention of the learned counsel for the petitioner that the term "letting out" has not been defined in the Act but by virtue of section 2 (s) of the Act the concept of letting out provided for in section 19 of the Income-tax Ordinance, 1979 (hereinafter referred to as the Ordinance), can be pressed into service, it may be observed that clause (s) of section 2 of the Act provides that any term not specifically defined in the Ordinance shall have the meaning assigned to it under the Income-tax Ordinance, 1979. In our view, for the purpose of ascertaining the definition of term "letting out" employed in sub-clause (ii) of clause (e) of the Act, we can only look at the definition, if any, given in the Ordinance, but we cannot refer to a charging section of the Ordinance. Mr. Nasim G Ahmed Khan is unable to point out any definition of the above term given in the Ordinance, but has referred to section 19 of the said Ordinance, which in our view is not permissible. If no definition of the above term "letting out" hat been given either in the Act or in the Ordinance, the, ordinary meaning of the above term shall be applicable. It may also beB observed that section 19 of the Ordinance provides as to how the income of the house/property is to be computed for the purpose of Income-tax under the Ordinance, which has no relevancy to the point in controversy.

7. Reverting to the last contention of Mr. Nasim Ahmed Khan that the valuation of the building has not been made in terms of the Act as well as rule 8 (3) of the Wealth Tax Rules, it will suffice to observe that since the petitioner has filed appeals, which are pending, the petitioner will have every right to urge this question before the Appellate Authority.

8. For the aforesaid reasons the petitions are dismissed, but there will be no order as to costs. M. Z. M. . Petitions dismissed.