' NASEEM SIKANDAR, J.---In this reference application under section 136(2) of the late Income. Tax Ordinance, 1979, the appellant an assessee of the Income Tax Department claims that following questions of law arise out of the impugned order of the Tribunal, dated 4-10-2001.
(i) "Whether on the facts and in the circumstances of the case the order passed by the Tribunal is sustainable under the law?
(ii) Whether on the facts and in the circumstances of the case the learned Tribunal was justified to rely on the alleged parallel cases ignoring the actual parallel case of plaza owner wherein the Department itself apply per Sq. Ft. Rate at Rs,2100?
(iii) Whether on the facts and in the circumstances of the case addition under section 13(1)(d) Rs, 17,93,750 and reduced by the Tribunal Rs,14,69,855 is justified under law?
(iv) Whether on the facts and in the circumstances of the case the Tribunal was justified to ignore Rule 207-A whereby it was mandatory on Respondent No,2 to evaluate a property on the basis of rates fixed by D.C. And without discussing the same in the Order?
(v) Whether on the facts and in the circumstances of the case the Tribunal was justified to ignore the dictum of judgments of the Tribunal itself and the higher Courts?"
2. Heard the learned counsel for the parties.
3. The assessee/petitioner, an individual at the relevant time derived income from running two bakery shops in the city of Lahore. For the assessment year, 1992-93 an assessment in its respect was framed at Rs,23,79,150 which was set aside in appeal for denovo proceedings. After remand on 31-12-1998 an assessm ent was framed at taxable income of Rs,23,79,150 which inter alia included two additions under section 13 of the late Income Tax Ordinance, 1979.
4. Before the learned First Appellate Authority the addition under section 13(1)(d) of the Ordinance at Rs,17,98,7.50 was contested. It was observed by the appellate authority that the appellant purchased a shop measuring 195 sq. Ft. In the period relevants to the assessment year, 1991-92 at Bhindara Centre, Ichhra, Lahore. The declared value at Rs,4,00,000 was found unexplained as well as inadequate.' Accordingly the Assessing Officer after rejection of the declaration version proceeded to make an addition of Rs,23,93,750 by adopting a rate of Rs,11,250 per sq. Ft. As purchase price of the shop. Learned First Appellate Authority though maintained the rejection of the declared price yet finding the estimated price to be on the higher side directed the same to be reduced to Rs,10,000 per sq. Ft. In other words the total value of the shop was taken at Rs,19,50,300.
Therefore, the addition under section 13(1)(d) was reduced to Rs,15,50,000.
5. On further appeal a Division Bench of the learned Tribunal again maintained the rejection of the return version. However, it Was noted that tile assessee was confronted with a. Rate of Rs,9,589 per sq. Ft. Therefore, the estimation of value at a higher sum. As against the confronted amount was found to be unjustified. It was accordingly required to be taken at . The aforesaid rate resulting into reduction of the addition '.Under the aforesaid provisions of law 'to Rs,8,25,000.
6. Learned counsel for the petitioner has contended -and we will agree that the department as well as the Revenue unjustly failed to appreciate and rule upon the, contention of the assessee that the Department could not adopt a higher rate in respect of the assessee than the one adopted in respect of seller Messrs Bhindara Centre, Ichhra, Lahore. On the basis of the assessment order made in respect of the seller Messrs Bhinclara Centre, Ichhra, Lahbre for the assessment year, 1992- 93 it was agitated all along' that the Revenue adopted only a rate of Rs,2,200 per sq. Ft. As sale price in the hands of the seller. Learned counsel for the petitioner is therefore, correct in pointing out that the same property could not be assessed at two different rates in the hands of the purchaser and the seller. When the department had accepted a rate of Rs,2,200 per sq. Ft. As sale price of the shop situated on the same floor on which the assessee had purchased the shop in question it could not adopt a higher rate by more than 5 times while estimating the cost price in the hands of the purchaser.
7. There is nothing on record to controvert the submissions made by the learned counsel for the petitioner. In fact the copy of the aforesaid assessment order recorded in respect of the seller almost 2-1/2 years after the framing of the assessment order in respect of the assessee bears witness to that fact. The contradiction in the treatment meted out to the seller'and the purchaser is more than evident from the record. Therefore, the treatment meted out to the assessee 'when jextiposed with the one extended to the .Owner of the same property appears totally unjustified and against law. The attempt on the part of the Assessing Officer to estimate the value of shop with reference to the values estimated in respect of other shops sold in the same shopping centre was only to justify his own estimation adopted in respect of the shop purchased by the assessee. It appears that at the relevant time the department had not yet framed an assessment in respect of the seller Messrs Phindara Centre, Ichhra, Lahore. Once it was done and that fact was properly brought to: the notice of learned CIT(Appeals) who decided the matter on 10-5-2001 and the learned Tribunal which recorded the impugned order on 4-10-2001 there hardly appeared any justification to maintain the treatment meted out to the assessee.
8. We are of the view that the shop purchased by the assessee could not be adopted at a rate higher than the one which was adopted in the hands of the seller at Rs,2200 per sq. Ft. By way of a reference it needs to be noted that in the assessment year, 1991 the seller Messrs Bhindara Centre, Ichhra, Lahore disclosed a rate of Rs,1,375 per sq. Ft. For 400 sq. Ft. Sold on the ground floor. The Assessing Officer taking into consideration the fact that in the preceding year a sale rate of Rs,2100 was adopted in respect of the area sold on the ground floor proceeded to enhance the same by Rs,100 and accordingly adopted a sale rate of Rs,2200 per sq. Ft. For the assessment year 1991-92.
9. That being, so, we will return a negative answer to the first four questions and hold that the estimation of purchase price in the hands of the assessee could not exceed Rs,2200 adopted in the hands of the seller for same property during the year under consideration. As far question No,5 is concerned, we find that this question does not arise out of the order of the Tribunal.
10. Reference answered accordingly.