TMI Blog1973 (6) TMI 10X X X X Extracts X X X X X X X X Extracts X X X X ..... he Wealth-tax Act, 1957. For the assessment year 1970-71, he submitted a return of his net wealth before the second respondent, the Wealth-tax Officer, Palghat. The return related only to his non-agricultural assets. He did not include any agricultural assets in the return on the ground that all his agricultural lands were in the possession of tenants, and the said lands vested in the State Government on January 1, 1970, by virtue of section 72 of the Kerala Land Reforms Act, 1963, which was before the valuation date. He claimed that the compensation payable by the Government for the said lands was not net wealth in respect of the year to which the assessment related. The second respondent rejected the claim, and made an assessment against ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... unconstitutional, and that the assessment of such an asset under the Wealth-tax Act was illegal and without jurisdiction. This objection can be summarily rejected, first, for the reason that the Supreme Court has held that the above amendment is valid and constitutional, and, secondly, for the reason that the contention that compensation payable for agricultural lands vested in the Government continues to be an agricultural asset is totally unsustainable. It was also contended before me that the compensation is payable by the Government in instalments in the future, and that such a thing would not amount to an asset on the valuation date. This contention is also hardly sustainable. Under the Kerala Land Reforms Act, the compensation for t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... purchase price payable by the tenant to the Government is the compensation payable by the Government to the land owner, and that it is based upon the rent payable under the contract of tenancy. Both the compensation and purchase price are to be determined on the basis of fair rent, which in most cases is less than the contract rent. The order of assessment cannot, therefore, be sustained in so far as it relates to the valuation of the compensation amount due to the petitioner under section 72-A of the Kerala Land Reforms Act. The penalty notice, exhibit P-2, is illegal on the face of it. It is in a printed form, which comprehends all possible grounds on which a penalty can be imposed under section 18(1) of the Wealth-tax Act. The notice h ..... X X X X Extracts X X X X X X X X Extracts X X X X
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