Wealth-tax valuation of disputed land must follow the valuation date and recognised methods, not a later compromise amount.

For wealth-tax purposes, the value of an assessee's disputed interest in land must be determined on the relevant valuation date under the prescribed valuation method, not by reference to a later compromise deed. A settlement amount received in a subsequent year for relinquishment of rights was treated as unreliable for fixing earlier market value because it reflected settlement dynamics and future expectations, not open market value on the valuation dates. For land and building, the Wealth-tax Act and Rules require valuation by recognised modes on the valuation date, and the circle rate was accepted as a reasonable indicator of fair market value. The Assessing Officer's reliance on the later compromise amount, without supporting material or reference to the valuation officer, was rejected.

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Issues: Whether, for wealth-tax purposes, the value of the assessee's interest in the disputed land for the relevant valuation dates could be taken at the amount received later under a compromise deed, or had to be determined with reference to the valuation date and the prescribed wealth-tax valuation method.

Analysis: The settlement amount received in a later assessment year for relinquishment of rights was not a safe basis for fixing the market value of the asset on earlier valuation dates. The assessee's interest in the property was under dispute during the relevant years, and the compromise reflected factors such as settlement dynamics and future expectations rather than the open market value of the asset on those dates. For land and building, the Wealth-tax Act and the Rules prescribe valuation on the valuation date by recognised modes, and the circle rate was accepted as a reasonable indicator of fair market value. The Assessing Officer, having adopted the later compromise amount without any supporting material or a reference to the valuation officer, failed to justify the addition.

Conclusion: The valuation adopted by the assessee on the basis of the circle rate was upheld, and the additions made by the Assessing Officer were not sustained.

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