TMI Blog2010 (5) TMI 799X X X X Extracts X X X X X X X X Extracts X X X X ..... vi (deceased), mother of Jarnail Singh, was the owner and in possession of the land in question, situated in village Sultanwind (Urban) and (Suburban), District Amritsar. She died on 12-5-2000. During her life time, Soma Devi had sold a piece of land measuring 2 kanals 3 marlas to M/s. Guru Ram Dass Charitable Trust, for a consideration of ₹ 5,37,500 on 24-4-1998. However, subsequently, the remaining entire land was acquired by the Government under the provisions of Land Acquisition Act, 1894 (hereinafter to be referred as the LA Act ) for Improvement Trust, vide notification dated 17-11-2000. Having completed all the codal formalities, the Land Acquisition Collector (hereinafter to be referred as the Collector ) determined the market value of the acquired land at ₹ 53,20,908, vide award dated 28-11-2003. However, the Government had further allowed increase at the rate of 12 per cent per annum as appreciation in the valuation of acquired land. 3. The revenue claimed that the value of the land in question exceeded the maximum amount, not chargeable to wealth tax, for the relevant period of assessment years and the assessee was required to file the returns. As Soma D ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... lage Sultanwind (Urban) and (Suburban), in the relevant assessment years before acquisition. 8. Sequelly, the Tribunal, relying upon its another judgment in case of CWT v. Amrit Lal Jindal Sons [WT Appeal No. 39 of 1999, dated 5-11-2004], has held that the value of 25 kanals 6 marlas of land situated in village Sultanwind (Urban) and (Suburban), which has already been acquired by the Improvement Trust, has wrongly been included in the net wealth of the assessee, pertaining to the subsequent assessment years, as the right to receive compensation is not an asset liable to tax under section 2(ea) of the Wealth-tax Act. 9. At the same time, the Tribunal has also held that as the solatium payable in terms of section 23(2) of the L.A. Act does not constitute market value of the land, therefore, the same is not chargeable to tax. Hence, the Tribunal, accordingly, disposed of all the appeals, vide impugned order dated 22-8-2008 (Annexure A3). 10. The revenue still did not feel satisfied with the impugned order (Annexure A3) and filed the present appeals, which were admitted to consider the following substantial questions of law by this Court :- 1. Whether on the facts and in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... erusal of the material on record would reveal that the original owner Soma Devi died on 12-5-2000. During her life time, she had sold a small parcel of land measuring 2 kanals 3 marlas to M/s. Guru Ram Dass Charitable Trust, vide registered sale deed dated 24-4-1998, but subsequently, the entire big chunk of the land in question of the assessee was acquired by the Improvement Trust and the Collector determined its market value as on 17-11-2000, the date of notification issued under section 4 of the L.A. Act. 15. Keeping in view that the facts of the case are neither intricate nor much disputed, the first core question, that arises for determination in these appeals, is that, what should be the fair market value of the land in question, which should be included in the assets of the assessee at the relevant time. 16.The main celebrated argument of the learned counsel for the revenue that the sale instance dated 24-4-1998 of the land measuring 2 kanals 3 marlas in the vicinity, ought to have been taken the value of the land and was liable to be included in the wealth of the assessee, is not only devoid of merit, but misplaced as well. On the other hand, the contention on behalf ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... judgment of this Court in S. Baldev Inder Singh s case (supra). 19. Therefore, it is held that the market price as determined by the Collector under section 23 of the L.A. Act would represent the actual value/market price of the land in question of the assessee at the relevant time, for the purpose of wealth tax, as also concluded by the Appellate Tribunal. No infirmity has been pointed out in the impugned order by the learned counsel for the revenue in this relevant direction. 20. Now adverting to the next question as to whether the solatium is part and parcel of the compensation to be included in the wealth of the assessee or not? This question is not res integra. The Hon ble Apex Court in Ghanshyam (HUF) s case (supra) examined the relevant provisions of the L.A. Act and observed that the additional amount under section 23(1A) and solatium under section 23(2) form part of the enhanced compensation. The law laid down in the aforesaid judgment is the complete answer to the problem in hand. In this view of the matter, it is held that the solatium is part and parcel of the compensation/value of the land. To that extent, the impugned order (Annexure A3) deserves to be and is he ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . 24. Be that as it may, as the learned counsel for the revenue has fairly acknowledged that there is no such parallel amendment in the Wealth-tax Act as compared to section 45(5) of the Income-tax Act, therefore, the law laid down by the Hon ble Supreme Court in Ghanshyam (HUF) s case (supra) would not come to the rescue of the revenue in this relevant connection, in view of the amended definition of assets, as per section 2(ea) of the Wealth-tax Act, which is in the following manner :- 2(ea) assets , in relation to the assessment year commencing on the 1st day of April, 1993, or any subsequent assessment year, means- (i )any building or land appurtenant thereto (hereinafter referred to as house ), whether used for residential or commercial purposes or for the purpose of maintaining a guest house or otherwise including a farm house situated within twenty-five kilometres from local limits of any municipality (whether known as Municipality, Municipal Corporation or by any other name) or a Cantonment Board, but does not include- (1)to (4)****** (5)any property in the nature of commercial establishments or complexes. Explanation 1.-For the purposes of this claus ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... estion after its acquisition, vide notification dated 17-11-2000, which stood vested in the State for all intends and purposes. He was only entitled to receive the enhanced compensation, if any. As the mere right to receive the enhanced compensation does not fall within the purview of assets, as envisaged under section 2(ea) the Wealth-tax Act, therefore, we are of the view that the same cannot be included in the wealth of the assessee and he was not liable to pay wealth tax, in view of the decision dated 15-9-2009 of this Court in case of Amrit Lal Jindal Sons (HUF) v. WTO [2009] 184 Taxman 143, in which, it was held that once the land could not be covered by definition of expression assets , then it would not be exigible under the Act. The same view was reiterated by this Court in case of CWT v. Amrit Lal Jindal Sons [WT Appeal No. 11 of 2005, dated 3-3-2010] and Nand Lal, Mohan Lal s case (supra). The contrary arguments on behalf of the revenue in this connection deserve to be and are hereby repelled, under the present set of circumstances. 28. Therefore, we are of the considered opinion that as soon as the land of the assessee was acquired and stood vested in the Stat ..... X X X X Extracts X X X X X X X X Extracts X X X X
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