2003 PLP (Trib (PTD)

3. Both the parties have been heard and relevant order perused. The learned A.R. of the assessee contended that the learned CIT(A) was not justified to confirm the treatment given by the assessee whereby he assessed property namely Rex Cinema in the hands of present assessee. The learned A.R. submitted that in the assessment year 1993‑94 the assessee Mr. Muhammad Jahangir gifted his 1/2 share to his real father namely Mr. Muhammad Shafi who later on in the assessment year 1995‑96 gifted 1/2 of his share to Mr. Ali Jahangir. Similarly. In the assessment year 1992‑93 Mr. Muhammad Bashir brother of the assessee gifted his 1/2 share in the property to his real mother namely Zanib Bibi who also later on in the assessment year 1994‑95 gifted 1/2 of her share to Mt. Hassan Jahangir. The learned A.R. submitted that as a result of these gifts the property in question was divided among four persons Le. Muhammad Shafi, Zanib Bibi. Mr. Ali Jahangir and Mr. Hassan Jahangir that means every co‑owner of the property has 1/4th share in the property. He submitted that above said persons are also wealth tax assessees and 1/4th share of every person has been assessed in their individual capacity and even the learned ITAT for the assessment years 1995‑96 and 1996‑97 confirmed the ownership of above said persons. Photocopies of the Tribunals' orders passed in the cases of above persons were also produced which were placed on file. The learned A.R. of the assessee submitted that all requirements regarding gift were fulfilled. In this regard he submitted that the Honourable Supreme Court of Pakistan has laid down three conditions for completion of gift transaction i.e. (1) Intention to make gift alongwith delivery (2) Acceptance. (3) Possession. Photocopies of "Iqrar Nama's" of four persons showing execution of gifts were also produced which were also placed on file. The learned A.R. submitted that how his gifted 1/2 share can be assessed in his hand when the gifted property was also being assessed in the hands of gifted person. He further contended that similar is the position with his brother who has gifted his property to his real mother then how can he sell his share to the instant assessee. Lastly it is submitted that for the assessment years 1993‑94 to 2000‑2001 the gifted property was being shown by the parents of the assessee in their returns and assessments in this regard are also completed. The learned D.R. on the other hand opposed the arguments advanced by the learned A.R. and prayed for the maintenance of the same.

4. After hearing both the parties and going through the orders of the Authorities as well as documents produced in support thereto, we are of the considered view that assessment of the property in question was wrongly made in the hands of the assessee. Perusal of the assessment order shows that the assessee had not shown this property in his wealth tax returns filed for the assessment year under appeal for the reason that he had gifted the share of said property to his real father namely Mr. Muhammad Shafi. Likewise his brother Mr. Muhammad Bashir also gifted his share to his real mother namely Zanib Bibi. Later oh both Mr. Muhammad Shafi and Zanib Bibi gifted 1/2 of their shares to Mr. Ali Jahangir and Mr. Hassan Jahangir. Perusal of the record shows that all these four persons who are the co‑owner of the said property were being assessed in their individual capacity. The plea of the assessee also stands strengthened vide Tribunal's order for the assessment years 1995‑96 and 1996‑97 when assessee as well as the Department were in cross‑appeals. Though the issue involved through those appeals was in respect of valuation of cost of construction of the Cinema building yet the issue involved in the present case can easily be solved if pare‑3 of the judgment passed in the case of Haji Muhammad Shafi vide W.T.A. Nos.933, 934 and 826, 827/LB of 1998, dated 5‑12‑1998 is taken info consideration which reads as follows:‑‑ "(3) The assessee has 1/4th share in the Rex Cinema Building having total area of 73 Marlas and constructed area of 32 Marlas.. Similarly, in the cases of Mst. Zanib Bibi, Mr. Ali Jahangir and Mr. Hassan Jahangir, who are also co‑owners having 1/4th share each, cross appeals for the same years were decided in the identical manner. The learned CIT(A) without appreciating the above facts confirmed the treatment accorded to by the Assessing Officer which is not tenable in the eye of law. A property after completion of gift transaction cannot be assessed in the hands of donor. Even otherwise one property or same share in the property cannot be assessed in the hands of two different persons. It is pertinent to mention here that PT‑1 Form has also been provided according to which property in question belongs to above mentioned four persons having 1/4th share each.

5. For the foregoing reasons we are of the considered opinion that the assessee after gifting away his share was no more owner of the property and has rightly not declared in his wealth tax return and the Assessing Officer, unjustifiably assessed the same in the hands of assessee. Likewise, the learned CIT(A) without appreciating the above facts confirmed the treatment of the Assessing Officer without any plausible reason. Hence orders of both the Authorities below on this issue stand annulled.

6. Appeals of the assessee succeed accordingly. C.M.A./880/Tax (Trib.) Appeals succeed.