TMI Blog2005 (1) TMI 364X X X X Extracts X X X X X X X X Extracts X X X X ..... -1990 fixed the cost of acquisition of the said land @ Rs. 100 per sq. yard and accordingly, awarded enhancement compensation alongwith interest thereon. This enhanced compensation was received by the assessee and his brother together with interest on 8-5-1991 after furnishing bank guarantee/surety bond. Against the order of the District Judge, Hisar, assessee and his brother as well as the State Government filed appeals before the Hon'ble Punjab Haryana High Court. The appeal filed by the State Government was dismissed by the High Court whereas the appeal of the assessee was allowed by it awarding cost of acquisition @Rs. 120 per sq. yard vide order dated 24-2-1994 which resulted in further enhancement of compensation. The decision of Hon'ble Punjab Haryana High Court was affirmed by the Hon'ble Supreme Court dismissing the appeal filed by the State Government on 22-7-1998. Meanwhile, the enhanced compensation awarded by Hon'ble Haryana High Court @Rs. 120 per sq. yard was received by the assessee on 20-12-1995 and the Assessing Officer having reason to believe on the basis of information coming to his possession that the net wealth of the assessee represented by his right t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Tribunal. 4. Out of the nine grounds raised by the assessee, which are common in all these appeals, the learned counsel for the assessee has not pressed the grounds challenging the validity of assessments completed by the Assessing Officer under section 16(3)/17. The same are, therefore, dismissed as not pressed. 5. As regards the other grounds, the learned counsel for the assessee has submitted that the following issues are mainly raised therein for the consideration and decision of the Tribunal:- (a) Whether the right to receive compensation, which was under challenge on the relevant valuation dates, could be included in the net wealth of the assessee for the purpose of wealth-tax? (b) Whether the right to receive compensation being incapable of being valued as per section 7(1) read with Schedule III, was includible in the wealth of the assessee? (c) Whether right to receive interest on the compensation was an asset chargeable to wealth-tax? 6. As regards the first issue mentioned in (a) above, the learned counsel for the assessee relied on the decision of Hon'ble Madras High Court in the case of CWT v. A.R. Krishnamurthy [2001] 249 ITR 239 as well as the decision of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... challenge on the relevant valuation dates could be included in the net wealth of the assessee for the purpose of wealth-tax it is observed that in the case of Pandit Lakshmi Kant Jha v. CWT [1973] 90 ITR 97, the Hon'ble Supreme Court has held that the definition of 'assets' as given in section 2(e) of Wealth-tax Act, though not exhaustive, shows its wide amplitude and there is no reason as to why the right to receive compensation cannot be included amongst the assets of an assessee. Explaining further, their Lordships of Apex Court observed that the right to receive compensation became vested in the assessee the moment he was divested of his estate and such right is a valuable right since it is based upon Statute and the liability to pay is not denied by the State. Similar view was reiterated by the Hon'ble Apex Court in the case of Mrs. Khorshed Shapoor Chenai v. Asstt. CED [1980] 122 ITR 21 (SC) wherein it was held that the right to receive compensation at market value on the dates of the relevant notifications unquestionably accrued to the deceased which was property and it would be such property that would pass on the death of the deceased. In the case of CWT v. Smt. Anjamali K ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... g the decision of Hon'ble High Court, we are of the view that the present value of enhanced compensation can fairly and reasonably be taken at 60 per cent after allowing a discount of 40 per cent as on all the valuation dates relevant to the years under consideration. Accordingly, we modify the impugned order of learned CIT(A) and direct the Assessing Officer to take the value of assessee's right to receive compensation at the undisputed amount of compensation originally awarded as increased by 60 per cent of the additional compensation which was in dispute on all the relevant valuation dates but awarded finally on the subsequent date i.e., 22-7-1998. Needless to observe that the value so determined will have to be reduced by the amount of compensation actually received by the assessee on or before the respective valuation dates. 11. As regards the second issue raised by the learned counsel for the assessee in the present appeal as to whether the right to receive compensation, which was incapable of being valued as per section 7(1) read with Schedule III, could be included in the wealth of the assessee, it is observed that in the case of CWT v. Pachigolla Narasimha Rao [1980] 134 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... proceedings and that too in the case of an assessee following mercantile system of accounting. The said analogy, therefore, cannot be extended to wealth-tax proceedings wherein only the assets belonging to the assessee on the relevant valuation date are required to be included in his net wealth chargeable to tax irrespective of method of accounting followed by him and since the interest in the present case had become finally payable to the assessee only as a result of Hon'ble Supreme Court judgment delivered on 22-7-1998, the same, in our humble opinion, could not be treated as an asset/debt belonging to the assessee on the valuation dates falling before that date. In that view of the matter, we find no justification in the action of authorities below in including such interest in the net wealth of the assessee for the years under consideration and reversing their orders, we decide this issue in favour of the assessee. 13. We are also inclined to agree with the contention of the learned counsel for the assessee that the value of other assets included by the Assessing Officer in the net wealth of the assessee on ad hoc basis without there being anything on record to support and s ..... X X X X Extracts X X X X X X X X Extracts X X X X
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