Law: Wealth Tax Act, (XV of 1963)

Section: 23

Wealth Tax----Liabilities---Securities from the tenant---Refundable---Disallowance of--Validity ---Assessee had received securities from the tenants which were refundable to the tenants when they vacated assessee's premises--­Agreement with the tenants and rent deeds had been produced Wherein the amounts of securities received had been mentioned separately from the rent with clear commitment that the same would be refunded to the tenants when the tenants vacated the property---Nature of refundable securities being quite different from the "unadjusted advance rent", both could not be treated alike and disallowed ---Assessee's appeal was accepted and claim of refundable amount of securities was allowed as an admissible liability by the Appellate Tribunal. 1995 PTD (Trib.) 942 and 1993 PTD (Trib.) 1378 distinguished. ORDER MUHAMMAD SHARIF CHAUDHRY (ACCOUNTANT MEMBER). ---Appeal has been filed by a wealth tax assessee to call in question appellate order dated 21-9-2001 passed by Commissioner Income Tax/Wealth Tax Appeal Zone-IV, Lahore for the year 2000-2001 under section 23 of the Wealth Tax Act. It has been contended in the grounds of appeal that the learned Commissioner was not justified to uphold the disallowance of liabilities. According to the appellant, his claim of liabilities is in the form of securities which have been received from the tenants and which are refundable to the tenants at the time of vacation of property by them and, therefore, the liabilities are admissible as deduction from wealth. 2. It has been submitted by the AR of the appellant that the judgments of the ITAT relied upon by the Wealth Tax Officer for disallowing assessee's claim are not applicable to his case. In the quoted judgments, it has been pointed out by the AR, the ITAT had disallowed claim of unadjusted advance rent as liability, whereas in assessee's case the claim is not that of unadjusted advance rent but the claim relates to amount of securities which was received by him and which are payable to the tenants when they vacate assessee's property. It has also been submitted by the AR that in the preceding years i.e. in the years from 1994-95 to 1999-2000 the…

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