I. T. A. NO. 851/ KB OF 1982-83, DECIDED ON 20TH SEPTEMBER,1985. Versus I. T. A. NO. 851/ KB OF 1982-83, DECIDED ON 20TH SEPTEMBER,1985.
ORDER
FARHAT ALI KHAN (MEMBER). ‑‑This appeal is directed against the order of learned Commissioner of Income‑tax (Appeals) recorded by him on 1st December, 1982 in so far it relates to assessment year 1980‑31.
2. The brief facts giving rise to it are that the appellant, an Association of Persons, constructed 54 shops and received Rs.9,10,00( as security deposits returnable on termination of tenancy from various tenants sometime in 1975. Out of this amount Re.8,30,000 were received in the accounting year ending on 30th June, 1976 and the balance of Rs.80,000 was received in the year ending on 30th June, 1977. The Income‑tax Officer was of the view that Rs.83,000 being 10 of Rs.8,30,000 and Rs.8,000 being 10 of Rs.80,000 was liable to be added under section 12(13) of the Income‑tax Ordinance, 1979, in the relevant assessment year and the same amount was to be added in the income of following five assessment years. Thus, he added Rs.91,000 to the total Annual Letting Value of the property. The appellant had also claimed Ra.15,717 as maintenance expenses but‑the Income‑tax Officer disallowed them on the basis of last years' treatment: The appellant felt aggrieved and went up in appeal and the learned Commissioner of Income‑tax (Appeals) confirmed both the orders of Income‑tax Officer.
3. Mr. Arif Muhammad Khan, Advocate appearing for the appellant firstly argued that the Income‑tax Officer had no jurisdiction to make addition under section 12(13) of the Income‑tax Ordinance, hence the order of both Officers below was void, illegal and inoperative. Mr. Amin‑e‑Ajam, the learned Departmental Representative, on the contrary, argued that both the Officers had correctly applied the provisions of section 12(13) of the Income‑tax Ordinance.
4. We have heard both the learned counsel for the appellant as well as the learned Departmental Representative at length. Section 12(13) of the Income‑tax Ordinance reads as under:‑‑
"Section 12(13)-----------Where an assessee, being the owner of a building, receives from any person to whom such building or any part thereof is let out on rent any amount which is not adjustable against rent payable by such person, such amount shall be deemed to be the income of the assessee and chargeable to tax under the head "Income from house property" in the income year in which such amount is received and the nine income years next following the said income year in equal proportion; and the amount so allocated to each income year shall be deemed to be the rent received in respect of such building or a part thereof."
From its perusal, it is clear that it applied to these receipts, which are received in a particular income year. It is our considered view that section 12(13) of the Income‑tax Ordinance cannon be applied to security deposits received by the appellant at any time prior to the promulgation of the Income‑tax Ordinance, for the simple reason that the language used by the legislature is in present indefinite tense. The first part of subsection (13) of section 12 empowers an Income‑tax Officer to treat the amount received by an owner of a building, which was not adjustable against the rent payable and the second part lays down the mode of treating the same as deemed income. In the first part the expression used is "where as assessee receives" and in the second the expression used is "the income year in which such amount is received". Both expressions are in present indefinite tense with the only difference that the first is in the active Voice whereas the second is in the passive voice. Keeping into consideration such conscious use of both the expressions in present indefinite tense it cannot be argued that the security deposits received in accounting years ending on 30th June, 1976 and 30th June, 1977 could be taken into consideration under this subsection. The reference of Mr. Amin‑e‑Ajam to section 12(7) of the Income‑tax Ordinance, and Explanation 8 to section 4(1) of the) repealed Income‑tax Act, with due respect to him, does not lend any support to both the officers below for the simple reason that the legislature deliberately used present perfect tense in both the repealed Act as well as the Income‑tax Ordinance, which indicate an act which stands completed sometimes in past. On top of all this, the Finance Ordinance, 1980 alongwith subsection. 13 also brought on statute book subsection (17) of section 12 of she Income‑tax Ordinance? which is as under:‑‑
"(17)------The provisions of subsections (13) to (16) shall also apply to an assessee who has received the amount referred to in subsection (13), (15) or (16) in the income year relevant to the assessment year commencing on the first day of July, 1980, ? or in any earlier income year so, however, that income chargeable) to tax in the manner laid down in the said subsections shall be charged to tax only in respect of the income year relevant to the assessment year commencing on the first day of July, 1980, or any assessment year thereafter."
It has specifically dealt with the issue in quite unambiguous and unmistakable terms. As such, we fell very mush constrained to uphold the contention of Mr. Arif M. Khan, the learners counsel for the appellant that both the officer below erred in interpreting subsection (13) of section 12 of the Income‑tax Ordinance and the order of Income‑tax Officer which was subsequently confirmed by learned Commissioner of Income‑tax (Appeals) is illegal, void and inoperative. It is, therefore, vacated,
5. Mr. Arif M. Khan, the learned' counsel for the appellant turning to his claim of Rs.15,717 us ‑maintenance expenses invited our attention to a decision of this Tribunal r ported are 1985 P T I) (Trib.) 240 and argued that since in his case 1iso the wages paid to a Chowkidar, a sweeper and pumpman alongwith electricity charges used for pumping of water to overhead tank have been included in the maintenance expenses, the aforesaid ruling came to his rescue. Mr. Amin‑e‑Ajam, the learned Departmental Representative on the contrary, pointed out that as per agreement entered into between the appellant as well as its tenants electricity bills for passage were tenants liability, hence it could not be allowed in any case. The main argument of learned Departmental Representative, however, was that an owner of a property was entitled to only these deductions, which were mentioned in section 20 of the Income‑tax Ordinance.
6. We have heard both the‑ learned counsel for the appellant as well as the learned Departmental Representative and have also perused the decision of this Tribunal mentioned above. The main argument in that case was also the same viz., that a property owner was entitled to a deduction only in respect of repairs. However, one of us sitting singly and relying upon an Indian Supreme Court's decision made the following observation:‑‑
"In Sital Das case (supra), although the point involved was regarding the charge of the maintenance allowance awarded to the family members of the assesses, yet the observation quoted above, is very pertinent. Thus I am in respectful agreement with the learned Appellate Assistant Commissioner when he says that these expenses are necessary and incidental to upkeep of property. I also agree with him when he says that they should be allowed being necessary charge against income. However, with due respect to him 1 think that his observations should be confined only to electricity charges and wages of the sweeper."
We think that in this case also the appellant has incurred some expenses for maintenance and preservation of the property. But it is for the first time that the appellant has spelt out the details of the maintenance expenses. Neither Income‑tax Officer nor learned Commissioner of Income‑‑tax (Appeals) could consider it. Nevertheless, the claim has been pressed all the time at every forum. As such, we think it just and proper that the impugned order be set aside and this issue be sent back to Income‑tax Officer for fresh investigation. The income‑tax Officer is directed to look into ail the relevant evidence and then dispose of the claim according to low, particularly in the light of the decision of this Tribunal mentioned above.
7. The appeal thus stands disposed of to the extent and in the manner as discussed above.
M.Y.H. ??????????????????????????????????????????????????????????????????????????????????????????????? Case remanded.