Law: Wealth Tax Act, (XV of 1963)

Section: SecondSched.,PartI,Cl.(I)

Law: Zakat and Ushr Ordinance, 1980

Section: 2(xxvi),3

Wealth Tax Act (XV of 1963)-----Second Sched., Part I, Cl. (I)---Zakat and Ushr Ordinance (XVIII of 1980), Ss. 2(xxvi) & 3---Exemption---Shares of Private Limited Company were claimed as exempt on the basis of deduction of Zakat on the face value of the shares---Assessing Officer determined the break up value and added the so determined value to the net wealth of the assessee as Zakat was deducted on the face value and no Zakat was deducted on the remaining value of the shares---First Appellate Authority directed the Assessing officer to exclude the shares from the computation of net wealth on the ground that .those shares were subject to Zakat which had already been deducted and the same were exempt from the wealth tax under the law---Validity---Shares in a private limited company were an asset and was subject to compulsory levy of Zakat through deduction at source @ 2.5 % of the paid up value on the valuation date in each Zakat year---Paid-up value of each share was Rs.10---Break-up value of shares was not its paid-up value and the break-up value had no relevancy for computation and deduction of Zakat, under the Zakat and Ushr Ordinance (XVIII of 1980)---Company deducted Zakat at source in accordance with law---Shares held by the assessee were subjected to Zakat and were exempt from the levy of wealth tax under cl. (1) of Part I of Second Sched. to the Wealth Tax Act, 1963---Order of First Appellate Authority was maintained and appeal of the Department was rejected by the Appellate Tribunal. ORDER KARAMAT HUSSAIN NIAZI (JUDICIAL MEMBER).---This appeal relates to assessment year 1998-99 and is directed against the order dated 20-5-2000 passed by the learned CWT(A), Zone-1. Islamabad, whereby shares in a private limited company were directed to be excluded from the computation of net wealth as these were subjected to deduction of Zakat. 2. We have heard both the learned representatives of the parties and have perused the relevant orders. 3. The relevant facts in brief are that in the assessment proceedings for the charge of wealth tax the assessee, an individual, declared the value of 69166 shares at Rs.20,25,000 held by him in a private limited company and…

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