Present value of future compensation must be used for wealth-tax valuation, not the eventual statutory payout.

The value of an assessee's right to receive compensation must be assessed at its present value on the valuation date when the compensation is payable only much later. It cannot be treated as equal to the full amount ultimately payable under the statute merely because the right exists on the valuation date. Applying the principles laid down by the Supreme Court, the Tribunal's view that the compensation amount itself was not includible in net wealth was held unsustainable, and the question was answered in favour of the assessee.

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Issues: Whether the value of the assessee's right to receive compensation, where the compensation was payable much later than the valuation date, was liable to be included in the net wealth of the assessee.

Analysis: The value of a right to receive compensation on the valuation date must be determined with reference to its present value as on that date. Where the compensation is to be determined and paid in future, it cannot be treated as equal to the full amount ultimately payable under the relevant statute. Applying the governing principles laid down by the Supreme Court, the Tribunal's view that the compensation amount itself was not includible in net wealth was not sustainable.

Conclusion: The question was answered in the affirmative, in favour of the assessee and against the Revenue.

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