Compulsory acquisition compensation must be valued on the relevant date, considering litigation risk and possible enhancement.

In compulsory land acquisition, the right to receive compensation is a single composite right to market value on the relevant valuation date, not separate rights for original and additional compensation. The Land Acquisition Officer's award is only an offer and is not conclusive for wealth-tax valuation. Where the award is challenged or accepted under protest, the assessing authority must value the right by reference to the valuation date and consider the hazards of litigation, including the possibility of enhancement. Later civil court enhancement does not by itself create a separate taxable right, but valuation cannot be confined mechanically to the initial award or treated as nil merely because enhancement is pending.

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Issues: Whether the additional compensation awarded by the civil courts on acquisition of land was liable to be included in the net wealth of the assessee, and whether the right to receive compensation had to be valued by taking only the Land Acquisition Officer's award or by taking account of the possibility of enhancement.

Analysis: The right arising on compulsory acquisition is one composite right to receive compensation for the land at its market value on the relevant date, and not two separate rights, one for original compensation and another for additional compensation. The Collector's award is only an offer and, where it is challenged or accepted under protest, the right to receive compensation survives and must be valued by the assessing authority with reference to the relevant date, while taking into account the hazards of litigation and the possibility of enhancement. The civil court's later enhancement does not by itself fix the value as on the valuation date, but the valuation cannot be confined mechanically to the initial award or treated as nil merely because enhancement is under dispute.

Conclusion: The Tribunal's view that the additional compensation had no value and was outside the assessee's net wealth was erroneous. The reference was returned unanswered and the matter was sent back for fresh consideration in the light of the Supreme Court decision.

Ratio Decidendi: In compulsory acquisition cases, there is only one right to receive compensation, and its value for wealth-tax purposes must be determined on the relevant valuation date by considering all surrounding circumstances, including the prospect and risk of enhanced compensation; the Collector's award is not conclusive and later court enhancements do not create a separate right.

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