Law: Wealth Tax Act, (XV of 1963)

Section: 17,14(2)

Law: Registration Act, 1908

Section: 49

Law: Transfer of Property Act, 1882

Section: 54

Wealth Tax Act (XV of 1963)--- ----S. 3---Liability to wealth tax---Land held by assessee under agreement to sell ---Assessee, by virtue of said agreement to sell, was authorised to enter upon the property for the purposes of development plan, obtaining possession from the occupants and effect provisional booking of various parts of the building intended to be constructed at site while ownership of the land was to remain vested in the vendor until payment of the consideration in full and execution of the sale-deed--­Assessee, held, incurred no liability to pay wealth tax in respect of the land during continuance of the agreement to sell. ORDER MIAN ABDUL KHALIQ (JUDICIAL MEMBER).---These three departmental appeals relating to assessment years 1987-88, 1988-89 and 1989-90 are directed against the order of the learned C.I.T. (A)-III, Lahore, dated 17-5-1990. The common objections of the Department in these appeals are: (i) That the learned C.I.T. (Appeals) was not justified to delete the charge of wealth tax on account of land for the assessment year under consideration as the assessee himself declared value of land in his wealth tax return for the above-mentioned year. (ii) That the learned C.I.T. (A) was also not justified to give direction to accept declared cost of work in progress in view of increasing trend in prices of materials used. 2. For the purposes of decision of these appeals, the relevant facts of the case arc that a plot of land measuring 11 kanals 9 marlas 80 sq.ft. known as Property No. S-19-R-20. 60-The Mall, Lahore belonged to M/s. Koh-e-Noor Textile Mills Ltd. The property was occupied by various tenants. On 5-7-1986 the assessee entered into an agreement with the owners for purchase of the properly, and paid earnest money of Rs.50,00,000. As per terms and conditions of sale agreement, the assessee could convey the property in its own name or in the name of its nominee. As per clause 2(b) of the aforesaid agreement, the assessee required the vendor to execute sale-deed in favour of his nominee M/s. National Industrial Co-operative Finance Corporation Ltd., a society registered under the Co-operative Societies Act. On 19th May, 1987 the owner…

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