1997 PLP 1184 (PTD)

NASIM SIKANDAR (JUDICIAL MEMBER)

The assessee in this further appeal for the assessment year 1992-93 is an individual and is engaged in sale of electrical goods. Original assessment framed in his respect for the year under review was completed at an income of Rs.34,

000. However, his case was reopened after another wing of the Revenue reported purchase of share in a shop and the basement underneath respectively measuring 18 sq. ft. and 31-1/2 sq. ft. for registered value of Rs.47,

000. The assessing officer found the rate per sq. ft. at Rs.940 to be grossly under stated keeping in view the commercial importance of the shop as well as the basement under it. After usual proceedings the assessee was served with a notice under section 13(2) of the Income Tax Ordinance on 9-4-1995 proposing adoption of value of 1/2 portion of Shop No.17-B, Shah Alam Market, Lahore at a rate of Rs.12,000 per sq. ft. and that of basement at a rate of Rs.4,500 per sq.ft. The intention was, therefore, expressed to adopt the value of the shop and basement at Rs.3,63,

750. The assessee did not dispute the proposed valuation inasmuch as in reply to the aforesaid notice the same valuations were declared both in respect of the portion of the shop as well as the basement. While explaining sources of investment the assessee claimed to have received a gift of Rs.3,15,000 from his real uncle Mr. Ahmed Din who also happened to be his father-in-law. The gentleman was summoned under section 148 of the Ordinance. He appeared and endorsed the claim of the assessee as to the factum of gift. It was claimed that the amount gifted to the assessee was earlier recovered by him as sale proceeds of a shop. However, the assessing officer disbelieved him for the following three reasons: "(i) Mr. Ahmed Din said that he had given Rs.3,15,000 for Javaid and his brother Younas for purchase of shop. It is pertinent to note that both brothers have purchased half portions each, through separate deeds. If any amount was ever given then it was used by the two brother and not only by one as claimed by the assessee. (ii) A.R. contended that amount of Rs.3,15,000 was paid out of sale of plot and gratuity received by Mr. Ahmad Din. However, Mr. Ahmad Din stated that entire amount was paid by means of sale proceeds only. (iii) The assessee's father/brother also are businessmen and it seems strange that instead of getting financial help from the assessee was gifted amount by his uncle who has own dependents to look after." Thereafter, an addition of Rs.3,15,000 was made towards business income which was commuted at Rs.80,

270. The total income for the year was accordingly computed at Rs.3,95,

270. Learned first appellate authority A.A.C. Sahiwal, through its order recorded on 26-2-1996 upheld the aforesaid addition made under section 13(1)(aa) as well as the trading and profit and loss additions. This has brought the assessee in further appeal before us.

2. Parties have been heard. Learned counsel states that the assessing officer clearly erred in fact and in law by making impugned addition after the donor had accepted the factum of gift. It is further claimed that the shop purchased by the assessee as also the basement under it was so small in area that adoption of value in their respect at a total sum of Rs.3,63,750 is fabulous and outrageous. In support of his submissions that after the donor had appeared and accepted the factum of gift the initial burden on the assessee was discharged reliance was placed upon 1990 PTD (Trib.) 774.

3. Learned D.R. on the other hand supports the orders of the authorities below for the reasons stated therein. Also states that once the assessee had himself returned the value of the property at the aforesaid sum his contention against the estimation of the value of the property is totally meaningless.

4. Having heard the parties we will certainly agree with learned D.R. that since the assessee himself returned the value of the demised property as against registered value of Rs.47,000 only, his complaint against the adopted value cannot be entertained. However, the contention of the learned counsel for the assessee equally bears weight as far the disregard of the factum of gift is concerned. In the aforesaid reported decision a Division Bench of this Tribunal in para. 7 at page 753 of the report held that if the creditor admitted advancement of any loan the onus to establish the source of income shifted to the Revenue. In this regard reliance was also placed upon 1985 PTD 433 re: Dhan Rajmal & Sons v. CIT of Income Tax. In this case a Division Bench of the Sindh and Balochistan High Court at Karachi found that where the assessee produced the alleged creditor the burden shifted to the department to prove that he was owner of the amount credited in his books. In the case before us the assessee produced the alleged donor who supported the declared version that the amount invested in the demised property was provided by him. Also he attempted to explain his own sources wherefrom the amount was doled out. The aforesaid three reasons on which the assessing officer disbelieved the claim of the assessee appear extraneous to the issue when seen in the perspective of the aforesaid reported decision. After the admission of the donor it was only him who was liable to be burdened with an addition of the kind and not the assessee. This being so, and the fact that A the Revenue has not been able to distinguish the aforesaid reported decision of this Tribunal, we will allow the plea and direct that the impugned addition under section 13(1)(aa) shall stand deleted altogether.

5. No other issue had been argued at the Bar. Therefore, rest of the assessment order is not interfered with.

6. The appeal succeeds to the extent indicated above. M.B.A./322/Trib. Order accordingly.