Law: Wealth Tax Act, (XV of 1963)

Section: 2,2(m)

Wealth Tax Act (XV of 1963)--S.2 (m)---Net wealth---Advance rent---Advance rent not being a liability is not debt owed within the meaning of S.2 (m) of the Wealth Tax Act, 1963, it can rather be identified as an, asset. 1993 PTD115 fol. 1988 PTD (Trib.) 585 distinguished. Begum Nazir Abdul Hamid v. Pakistan PLD 1964 Lah. 7; Ghansham Singh v. CIT 1984 PTD 21; 1988 PTD (Trib.) 315; W.T.As. Nos. 1-10 (PB) of 1980-81; 1988 PTD 585 (Trib.) and Standard Mills v. CWT, Bombay (India) (1967) 63 ITR 470 (SC) ref. ORDER MUHAMMAD MUSHTAQ (ACCOUNTANT MEMBER).---All these appeals have been filed on behalf of the Wealth Tax Department challenging a combined order of the learned CIT (Appeals) Zone-3, Lahore, dated 8-2-1989. 2. The disputed issue in all these appeals being common, all these appeals are proposed to be disposed of by a combined order as under. 3. The respondent in this case Mr. Muzaffar Ali (hereinafter referred to as the assessee) is an individual who has been assessed to wealth tax for all these years. The only disputed issue in these appeals is treatment of advance rent. The assessee rented out his Property No. SE-16-R-23 situated on Davis Road, Lahore and received Advance Rent for five years w.e.f. 1-7-1984 which was to be adjusted against monthly rent. On respective valuation date for the above years the assessee claimed unadjusted rent as liability in the wealth tax return and sought deduction of the above amounts from gross wealth of the assessee. The W.T.O. refined to consider the unadjusted advance rent as liability of the assessee or debt owed within the meaning of section 2(m) of the Wealth Tax Act, 1963. 4. Aggrieved by this treatment, the assessee preferred first appeal. The learned CIT (Appeals) accepted the appeals of the assessee with the following observations:--- "Advance rent obtained from U.B.L. in respect of Property No. 12-D, Davis Road, Lahore has been claimed as liability. The assessing officer found that as per lease deed the appellant was bound to refund the advance rent on premature termination of lease. It was held that this was a contingent liability. I think where the loan deed expressly gives a provision for refund of advance rent,…

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