2010 PLP (Trib (PTD)

Titled two wealth tax appeals pertaining to the assessment years 1999-2000 and 2000-2001 have been directed against the combined impugned order dated 174-2008 passed by the learned CIT(A) RTO., Lahore. The sole grievance of the assessee for both the years under appeal is that the learned CIT(A) was not justified to remand the case to the Assessing Officer for re-assessment after ascertaining the latest position of litigation regarding ownership of the property known as 92-B, Model Town, Lahore.

2. Briefly stated the facts of the case are that original assessment in the present case was finalized under sections 16(3)/23 of the Wealth Tax Act, 1963 (hereinafter called "the Act") at net wealth of Rs.19480265 and Rs.19536618 respectively. Being aggrieved the assessee approached the learned first appellate authority who set aside the case with the direction that valuation of immovable assets be made as per Rule 8(3) of the Wealth Tax Rules, 1982 and ownership of the plot be determined in the light of judgment passed by the honourable High Court, Lahore. In pursuance of the said order, re-assessments were completed by adopting the value of plot No.92/B, Model Town, Lahore Rs.10920000 each for both the years as against originally assessed at Rs.16490000. However, the issue of ownership was remanded to the Member Board of Revenue/ Chief Settlement Commissioner for hearing and decision of the case afresh as per direction of the honourable High Court Lahore vide order dated 26-11-2002. The Taxation Officer observed that since the matter with regard to ownership had not yet been decided and the assessments were going to be barred by time, it would be finalized as per record after making the valuation of property under Rule 8(3) of the Wealth Tax Rules, 1982. Aggrieved by the said order the assessee preferred appeal before the learned first appellate authority who vide an order dated 17-1-2008 remanded the case to the Taxation Officer for re-assessment after ascertaining the latest position of litigation regarding ownership of the property known as 92-B, Model Town, Lahore. Further directed that parameters fixed by the learned ITAT to evolve proper basis of valuation should be strictly followed and if warranted an independent valuer be appointed as provided under section 7A of the Wealth Tax Act, 1963 for valuation of the said plot. Still dis-satisfied with the impugned findings recorded by the learned first appellate authority, the assessee is in further appeal before the Tribunal.

3. Both the parties have been heard and relevant orders perused. The learned counsel of the assessee contended that since the honourable. High court vide its order dated 26-11-2002 declared the order of the Deputy Settlement Commissioner dated 6-12-1980 to be without lawful authority and of no legal effect, thus the assessee was never owner of the said plot. Further submitted that the Assessing Officer himself noted in the order dated 25-6-2007 passed under sections 16(3)/23 of the Act that Model Town Co-operative Housing Society Ltd., Lahore had cancelled the membership of the appellant in the record of ownership of the plots. It was argued that in a number of judgments the Tribunal has held that if a person was not the owner of an asset, question of its valuation in his hands on the respective valuation dates did not arise. Reference in this regard was made to the reported judgments cited as 2009 PTD (Trib) 1551 and 1996 PTD (Trib)

905. While summing up, it was argued that history of the case, as confirmed by the Tribunal, bears out that the value of the plot was always finally assessed at Rs.31,700 from 1984-85 to 1998-99. The learned D.R. on the other hand opposed the arguments advanced by the learned A.R. and prayed for maintaining to the impugned findings recorded by the learned first appellate authority.

4. After hearing both the parties and going through the relevant orders, we are constrained to observe that the contentions raised by the learned counsel of the assessee carry weight. Admittedly, the honourable High Court Lahore vide its order dated 26-11-2002 declared the order of the Deputy Settlement Commissioner dated 6-12-1980 to be without lawful authority and of no legal effect, thus the assessee was not owner of the said property. Even otherwise, the Assessing Officer has himself admitted that Model Town Co-operative Housing Society Lahore had cancelled the membership of the appellant in the record of ownership of the plots. Furthermore during the dispute regarding ownership, the assessee was assessed at Rs.31.700 from 198.4-85 to 1998-99. In this view of the matter we have no hesitation in holding that assessee was not owner of the property in question on the valuation date since property allotted to the assessee was cancelled by the Model Town Authorities, hence the assessee could not be burdened with the incidence of wealth tax. Resultantly, the impugned order of the learned CIT(A) is directed to be vacated and that of the learned WTO stands annulled.

5. Appeals of the assessee succeed. H. B. T./144/Tax(Trib.) Appeals allowed.