9911796707
TMI Blog1980 (8) TMI 50X X X X Extracts X X X X X X X X Extracts X X X X ..... er the W.T. Act showing a net wealth below the taxable limit. The assessee had included in the net wealth an amount of Rs. 12,756 being the compensation for the lands acquired. The subordinate judge of Chingleput, by his judgment and decree dated October 28, 1968, awarded an enhancement of the compensation by Rs. 68,030 for the lands acquired together with Rs. 10,204.50, being 15 per cent. solatium on the enhanced compensation, making in all Rs. 78,234.50, with interest at the rate of 4 per cent. from the date of taking possession till the date of deposit. He was also held entitled to a sum of Rs.5,750 which was wrongly deducted by the Land Acquisition Officer as reclamation charges. The assessee had actually received a sum of Rs. 1,00,756 as additional compensation during the accounting year relevant to the assessment year 1971-72. In the assessment order dated March 14, 1972, in respect of the assessment years 1965-66 to 1969-70, the WTO, noticing that the amount of compensation actually received in a subsequent year came to Rs. 1,00,756 and that claim for a still higher compensation was pending in the High Court, estimated the total value of the compensation receivable from the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... civil court, and that the estimation by the WTO of the market value at Rs. 1,75,000 on each of the valuation dates did not appear to him to be incorrect. The assessee preferred a further appeal to the Tribunal. By the time the appeal was taken up for hearing by the Tribunal, the High Court had enhanced the compensation further and had fixed the market value at Rs. 1,37,506. The Tribunal, therefore, proceeded to consider as to whether the enhanced compensation fixed by the High Court could be said to represent the market value as on the respective valuation dates and finally held that the final enhanced compensation, interest and solatium will all date back to the date when the lands were taken possession of by the Government and that, therefore, this value will have to be substituted as the market value and has to be taken in the net wealth on the respective valuation dates. Accordingly, the Tribunal directed the WTO to adopt the final compensation amount payable to the assessee together with the interest up to the date of deposit and the solatium thereon as the value to be included in the net wealth in the place of Rs. l,75,000 adopted by him. At the instance of the assessee, t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y capable of sale in the open market was a highly debatable question. This case was considered along with another case relating to the estate of Shapoor, son of Rashid, who died on May 7, 1965. We do not consider it necessary to set out the facts in Shapoor's case as the facts in Rashid's case is mere appropriate for our purpose. The Supreme court did not have any doubt in holding that the right to receive compensation at the market value on the dates of the relevant notifications accrued to the deceased on the vesting of the estate in the Government and this right to receive compensation at the market value was " property " and constituted an asset for the purpose of both estate duty and wealth-tax and it is such property that would pass on the death of the deceased. The Supreme Court then proceeded to consider the argument of the accountable person in that case that no sooner the Collector made his awards determining the amounts of compensation payable to the claimants under s. 1 of the Land Acquisition Act, the right to receive compensation must be regarded as having merged in the awards and that what the claimants would be left with thereafter was merely a right to agitate the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ow that awarded by the Collector, the estimated value can be equal to the Collector's award or more but can never be equal to the tall claim made by the claimant in the reference nor equal to the claim actually awarded by the civil court inasmuch as the risk or hazard of litigation would be a detracting factor while arriving at a reasonable and proper value of this property as on the date of the deceased's death. The assessing authority will have to estimate the value having regard to the peculiar nature of the property, its marketability and the surrounding circumstances including the risk or hazard of litigation looming large at the relevant date. " It is seen from the above passage that if, on the relevant date, the Land Acquisition Collector has not made any award the WTO had to estimate the value of the right to receive compensation for the property acquired at the market value as on the valuation date under the W.T. Act. If the Land Acquisition Officer has made an award and the claimant has not accepted and a reference is pending in the civil court on the relevant date, the WTO has to evaluate that right to receive compensation at figure which shall not be below the amount ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... o estimate the value again as on the relevant date for each of the subsequent years having regard to the risk or hazard of litigation and the peculiar nature of the property and its marketability. We are, therefore, of the view that for the assessment years 1965-66 to 1969-70, the WTO has to estimate the value of the right to receive compensation in accordance with the judgment of the Supreme Court, referred to above, at a figure which may be equal to the amount awarded by the Land Acquisition Officer or more, and for the years 1970-71, at a figure which may be equal to Rs. 1,00,756 awarded by the civil court or more, but such estimate cannot be equal to the tall claim made by the claimant in the reference, nor equal to the amount actually awarded by the High Court. Though the Tribunal noticed that the WTO had only estimated the value and not relied on any compensation awarded by the civil court, it did not go into the question as to whether the estimate made by the WTO was in accordance with law. As already noticed, while setting out the facts, the Tribunal decided only the question as to whether the enhanced compensation awarded by the High Court could be said to represent the ..... X X X X Extracts X X X X X X X X Extracts X X X X
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