1992 (7) TMI 55 - HC - Wealth-tax

High Court directs Tribunal to refer exclusion of Rs. 7,890 from deposit account as asset. Compensation not included in wealth.

The High Court partially allowed the application, directing the Tribunal to refer question No. 2 regarding the exclusion of Rs. 7,890 from the compulsory ... Initial Compensation, Wealth Tax Issues:1. Inclusion of compensation amount in net wealth for assessment year 1977-78.2. Exclusion of amount from compulsory deposit account as an asset.Analysis:The petitioner sought reference of two questions to the High Court. The first question pertained to the inclusion of a compensation amount of Rs. 23,309 in the net wealth for the assessment year 1977-78. The amount was initially awarded and remained in dispute until August 23, 1982, but was received on April 5, 1984. The petitioner argued that this amount should not be added to income on the relevant valuation date of March 31, 1977, or only a discounted value should be considered. However, the court disagreed, stating that once the Collector makes an award, the amount offered cannot be reduced. As the acquisition proceedings were finalized, and possession of the land was taken before the valuation date, the petitioner's right to receive the amount became final. The court held that the amount was indeed an asset of the assessee on the valuation date, and the petitioner had the option to receive it even during a dispute over enhancement of compensation.Regarding the second question, which concerned the exclusion of Rs. 7,890 from the compulsory deposit account as an asset, the court noted a similar question had been raised in a previous case and needed to be referred. The petitioner contended that there should be no distinction between original and enhanced compensation based on a Supreme Court decision. However, the court found that case irrelevant to the current matter, emphasizing that the issue was whether the amount was due to the petitioner as an asset on the valuation date. The court concluded that the amount of Rs. 23,309 was unquestionably an asset of the petitioner at that time, and no provision of law deprived the petitioner of that amount after finalization of the acquisition. Consequently, the court ruled that the first question did not require a reference, but the second question needed to be referred to the High Court.In summary, the High Court partially allowed the application, directing the Tribunal to refer question No. 2 to the court while rejecting the need for a reference on question No. 1. No costs were awarded in this matter.