TMI Blog2010 (5) TMI 832X X X X Extracts X X X X X X X X Extracts X X X X ..... ot absolute right. The mere right to receive compensation/enhanced compensation is variable, speculative and inchoate. Such right cannot be treated as wealth and includible in the previous returns of the assessees as such. Hence, the question of law posed in these appeals is answered against the Revenue and in favour of the assessees. - ASHUTOSH MOHUNTA and MEHINDER SINGH SULLAR, JJ. Sanjeev Kaushik, for the Appellant Rajiv Sharma, for the Respondents JUDGMENT Mehinder Singh Sullar, J.-As identical questions of law and facts are involved in the aforesaid appeals, pertaining to the asst. yrs. 1990-91, 1991-92 and 1992-93, having arisen out of the same impugned order, therefore, we propose to dispose of the same, vide this common judgment, in order to avoid the repetition. However, for facilitation, the crux of the facts has been extracted from WT Appeal No. 55 of 2009. 2. The epitome of the facts, culminating in the commencement of, relevant for disposal of present appeals and emanating from the record, is that, in pursuance of notification dt. 23rd May, 1983, the land of the respondent-assessees Nand Lal, Mohan Lal etc. (for brevity the assessees ) was a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r the previous period of relevant assessment years, vide order dt. 26th March, 2002 (Annex. A1). 7. Aggrieved by the order (Annex. A1), the assessees filed the appeals before the CWT(A). The first appellate authority has held that since no compensation was received during the financial years 1989-90 and 1990-91, so, no amount of compensation is taxable on this account for the asst. yrs. 1990-91 and 1991-92 and deleted the addition of the enhanced compensation for these years. Hence, partly allowed the appeals, vide order dt. 7th Feb., 2008 (Annex. A2). 8. Aggrieved by the order (Annex. A2), the Revenue filed the appeals, which were dismissed by the Tribunal, vide order dt. 23rd Jan., 2009 (Annex. A3). 9. The Revenue still did not feel satisfied with the impugned order (Annex. A3) and filed the present appeals, raising the following substantial question of law for determination by this Court : Whether on the facts and circumstances of the case and in law, the Tribunal was right in holding that right of the assessee to receive compensation and interest accrued thereon is not liable to wealth-tax without adjudicating upon the specific ground of appeal taken by the Revenue ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nsation has been prescribed under ss. 16 and 17 r/w s. 23 of the said Act. The WTO required the assessee to furnish particulars of the compensation due from the Government, but he was unable to furnish the same, but stated that his agricultural income from the lands used to be assessed at ₹ 1,00,000 per annum. Taking the net agricultural income at ₹ 80,000 and applying the provisions of s. 17(1) of that Act, the WTO estimated the compensation payable to the assessee and after deducting therefrom the interim compensation already received by the assessee, the amount of compensation was added to his assets. Although the appeals preferred by the assessee were dismissed by the AAC, but the further appeals filed by the assessee were allowed by the Wealth-tax Tribunal. The question of law raised in the reference petition was also answered in favour of the assessee by the Calcutta High Court. 14. Having interpreted the definition of assets under old s. 2(e) of the WT Act relatable to the asst. yrs. of 1957-58, 1958-59 and 1959-60 and after considering law in the case of Pandit Lakshmi Kant Jha's (supra), it was ruled by the Hon'ble Supreme Court as under : For th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e. In order to decide the real controversy between the parties, a glance of provisions of LA Act is essential. 18. According to s. 3(a), the expression land includes benefits to arise out of land, and things attached to the earth or permanently fastened to anything attached to the earth. Sec. 3(b) provides that the expression person interested includes all persons claiming an interest in compensation to be made on account of the acquisition of land under this Act; and a person shall be deemed to be interested in land if he is interested in an easement affecting the land. 19. Sequelly, the State is enjoyed to comply with the statutory requirements contained in ss. 4 and 6 of the LA Act. Sec. 4 lays down the intention/declaration of the State to acquire the land, while under s. 6, the public purpose gets crystallized and becomes compulsive. Thereafter, the State is entitled to authorize the Land Acquisition Officer to proceed with the acquisition of the land and to make the award. 20. Sec. 11A of the LA Act prescribes limitation to make the award within two years from the last date of the publication envisaged under s. 6. Not only that, in an appropriate case, where the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... mined by the Civil Court. The determination of adequate compensation assessed by the Civil Court can further be challenged in appeal in the High Court and then to Supreme Court, either by the landowner, person interested or by the State. It is not always true that the market value assessed by the Civil Court would be upheld by the High Court. The Hon'ble Supreme Court can still reverse the order of the High Court in this connection. Thus, the apportionment of compensation amount of landlords and person interested may vary from stage to stage, during the course of final determination of compensation by the Courts. Even if the appeal filed by the State was allowed in its entirety either by the High Court or by the Supreme Court, then the right to payment of enhanced compensation would have fallen altogether. In such a situation, if the entire amount of compensation, as determined by the Civil Court or by the High Court, as the case may be, is added in the wealth of landowner in the assessment year, on the basis of mere right to receive (without actual payment), which may subsequently be reversed, in that eventuality, it will give rise to more complications. Meaning thereby, under ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... mount of compensation of ₹ 7,24,914 was not income arising or accruing to the respondent during the previous year relevant to the asst. yr. 1956-57. 26. Therefore, we are of the considered opinion that the law laid down in the aforesaid judgment is fully applicable in the instant case in this relevant connection. 27. Faced with this situation, an attempt has been made on behalf of the Revenue to contend that since the Hon'ble apex Court has distinguished the Hindustan Housing Land Development Trust Ltd. case (supra) in subsequent case CIT vs. Ghanshyam (HUF) (2009) 224 CTR (SC) 522: (2009) 26 DTR (SC) 129: (2009) 315 ITR 1(SC), so, the same is inapplicable in this case. The argument, at the first instance, appeared somewhat attractive, but when it was analyzed, in regard to inherent and remarkable difference in the relevant provisions of WT Act and IT Act, then, we are of the considered opinion that this contention is again not tenable as well. The Hon'ble Supreme Court in Ghanshyam's case (supra) has considered the judgment in Hindustan Housing Land Development Trust Ltd.'s case (supra) vis-a-vis the insertion of s. 45(5) of the IT Act w.e.f 1st Ap ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... appeals of the Revenue, vide impugned order (Annex. A3), the operative part of which is as under : 2.1 In the assessment years at hand, the AO had included the right to receive enhanced compensation and interest accrued thereon notwithstanding the fact that no compensation was received and the matter was in dispute. The learned CIT(A) concluded that the right of the assessee was inchoate, in as much as it was not certain whether such amount will be received or not. The whole matter depended upon the outcome of the appeal. Both the parties agreed that such an inchoate right did not represent any wealth in praesenti and, therefore, nothing could be brought to tax as wealth on the mere expectation that some amount may be received in future. Accordingly, it is held that there was no error in the order of the learned CIT(A), which required correction from our side. 3. In the result, both the appeals are dismissed. 30. Meaning thereby, the Tribunal has decided the matter on the agreement of both the parties. Once the Tribunal has decided the case with the consent of the parties, then the very maintainability of the appeals by the Revenue is doubtful and the Revenue cannot poss ..... X X X X Extracts X X X X X X X X Extracts X X X X
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