Net wealth valuation of land acquisition compensation turns on present value on the valuation date, not future enhancement.

The right to receive compensation for acquired land was considered, for net wealth purposes, only to the extent of its present value on the valuation date. The full future compensation, including any enhanced amount and related interest, was not treated as includible in wealth merely because it might later become receivable. Only the amount actually receivable on the relevant valuation date could enter net wealth, and any subsequent enhancement would be relevant only in the valuation year in which it became relevant. The Tribunal's view in favour of the assessee was upheld.

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Issues: Whether the right to receive compensation for acquired land, including enhanced compensation and interest, was assessable in the assessee's net wealth before the assessment year 1992-93.

Analysis: The appeal concerned wealth-tax liability for assessment year 1985-86. The assessee's land had been acquired and a notice was issued to tax the right to receive compensation. The governing principle applied was that the asset, if at all includible, is only the right to receive compensation as it exists on the valuation date, and its value is the present value on that date, not the entire amount that may ultimately be received. Amounts actually received or receivable on the valuation date alone can be brought to tax in net wealth, while any future enhancement would be considered only when it becomes relevant for the valuation date of the concerned year.

Conclusion: The right to receive compensation was not to be included in the assessee's net wealth beyond its present value on the valuation date, and the Tribunal's view in favour of the assessee was upheld.

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