Law: Income Tax Ordinance, 1979

Section: 19,19(2),156

Income Tax Ordinance (XXXI of 1979)---Ss.19 & 156---Income from house property---Rectification of mistake--¬Assessee was a co-owner of property let out to a company of which he was a Director---Company (the tenant) sublet the property to other tenants on much higher rent than what was being paid to the assessee---Assessee declared its share from rent received from the company which was far less than the rent received by the company from the sub-lettees---Assessing Officer considered the position as collusive arrangement between the assessee and the company and assessees income from property was charged to tax on notional basis on account of the rent received by the company from the sub-lettees rather than actual rent received by the assessee from the company---Companys assessment had also been made separately against which application under S.156 of the Income Tax Ordinance, 1979 was pending asserting that assessment may be cancelled in the case of company because the income from property had been assessed in the hand of individual owner ---Validity--¬Provisions of S.19(2) of the Income Tax Ordinance, 1979 provide that it was not always the rent actually received, but the sum for which property reasonably be expected to be let from year to year was liable to tax--¬Property had admittedly been let out on a higher rent by the lessee, which was a limited company and owners of the property being the Directors of said company Assessing Officer was justified in making assessment of income from property on the basis of rent received by the lessee/company--¬Annual value being relatable to the building owned by assessee, value assessable shall comprise of the amount which even a sub-lessee or sub-tenant pays for its occupation---Assessment was confirmed by Appellate Tribunal in circumstances. M. Rehman, Income-tax Officer and others v. Narayangang Company (Pvt.) Ltd. (1971) 23 Tax 223; (1978) 113 ITR 136; 1992 PTD (Trib.) 161 and 1989 PTD (Trib.) 859 distinguished. 1996 PTD (Trib.) 122 and I.T.As. Nos. 933 to 937/LB of 1991-92 ref. ORDER MAHMOOD AHMED MALIK (ACCOUNTANT MEMBER).--The assessee has filed appeals for the assessment years 1988-89 and 1989-90. 2. The…

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