Law: Income Tax Ordinance, 1979

Section: 19,16,5,9,131(4),111(2),59,134,19,68,59, 131(2),19(3),Sched.

Law: Income Tax Rules, 1982

Section: 5,9

(a) Income-tax Ordinance (XXXI, of 1979)--Ss. 19, 16 & 5 & 9--Income-tax Rules, 1982, Rr. 5 & 9--Property in occupation of the owner for which rent is received from the employer of the owner can be treated to be property let out in terms of S.19 of the Ordinance--Such a house thus cannot be treated as self-occupied for the simple reason that the owner was occupying the house as an employee and not as an owner--Income of person living in such a house would be computed firstly under S.19 and secondly on account of the value of perquisites of having a rent-free accommodation provided by the employer, under S.16 and this would not amount to double taxation of the income of an employee--Such a case would, however, not be termed as case of concealment. An individual, employed with the National Bank of Pakistan entered into a lease agreement with the same bank letting out his self-occupied house for his own residence at the cost of the Bank and received monthly, rent during the assessment year 1984-85. This amount was not only declared in the return of income along with the salary earned but 10% of the basic salary was offered for tax as provided under rule 5 of Income-tax Rules, 1982. Rent received from the Bank was however claimed exempt under section 19 (3) of the Income-tax Ordinance, 1979 being a property in occupation of the owner for purposes of his own residence. The Income-tax Officer did not agree with the views of the assessee and treated the amount of rent received as concealed income, thereby excluding the return from the purview of the Self-Assessment Scheme, in view of para 9 of Circular No.5 0f 1984 issued by Central Board of Revenue regarding the Self-Assessment Scheme of Income-lax for 1984-85. Section 19 (1) of the Income-tax Ordinance, 1979 clearly lays down that only rental value shall be chargeable under the head "income from house property". In the present case House was leased out on rent for which a sum was received by the owner irrespective of the fact that whether the owner occupied it subsequently or someone else. That point is not relevant to the issue. The material point is that the house was leased out on rent, which brings…

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