9911796707
TMI Blog1984 (2) TMI 217X X X X Extracts X X X X X X X X Extracts X X X X ..... on for the acquisition awarded by the Land Acquisition Officer (LAO) amounted to Rs. 1,14,000. The owner-HUF of the land filed an appeal against this award disputing the quantum of compensation as inadequate ; in the appeal proceedings before the District Judge, enhanced compensation for the acquisition was determined at Rs. 2,44,989 and this amount was paid to the HUF. At the same time since the Government filed an appeal against the order of the District Judge to the High Court, the awardee was required in terms of the Court's order to furnish a bank guarantee for refunding the amount of the enhanced compensation in the event of an adverse judgment of the High Court. What the awardee, i.e., the HUF, did was to take out a fixed deposit for ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed deposit belonged to the HUF or not and the ownership of the asset by the HUF was in no way affected by the mere contingency that the amount of the compensation would require to be refunded in the event of an adverse judgment of the High Court. Thirdly, the WTO held that in any case so far as the assessee was concerned, he had received fixed deposit as his share on a partial partition effected in his HUF and that the encumbrance or burden created by the pledge could not be said to be a liability of the assessee, but was that of the HUF. In this view the WTO included the full value of the fixed deposit as an asset of the assessee in the computation of his net wealth. The Commissioner (Appeals) confirmed this inclusion and appears to have b ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... and if so, at what amount, are : firstly, what was the nature and quality of the encumbrance or burden created by the pledge ? Was this encumbrance or burden created on the property itself, i.e., the fixed deposit receipt ? If so, did the assessee acquire the asset, i.e., the fixed deposit receipt subject to the encumbrance ? We have, therefore, to consider in the first instance as to what are the legal consequences of property which is given over as pledge. We may refer with advantage to the concept and meaning of 'pledge' in law to Prem's Judicial Dictionary, Vol. III, 1964 edition : " Pledge is a delivery of goods to the creditor as security for his debt and the right to the property vests in the creditor so far as is necessary, to sec ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the case of CWT v. P.N. Sikand [1977] 107 ITR 922. Respectfully following the principles laid down by the Supreme Court in that case, namely, that market price as on the valuation date of property which is subject to an encumbrance or burden can only be determined after discounting the value of such encumbrance or burden, we hold that the authorities below were in error to ignore the fact that the fixed deposit receipt in question could be valued without discounting the encumbrance which lay upon it by reason of the pledge. 10. We may now examine the contention put forth by Shri Sathe that the liability for redemption of the pledge would not affect its sale price since that liability would have arisen only if the fixed deposit receipt was ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
