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Issues: (i) Whether the deceased had lost ownership and acquired no enforceable right to compensation at the time of death when the land acquisition proceedings were still incomplete. (ii) Whether the compensation awarded after death was includible in the deceased's estate for estate duty purposes.
Issue (i): Whether the deceased had lost ownership and acquired no enforceable right to compensation at the time of death when the land acquisition proceedings were still incomplete.
Analysis: The land acquisition notification under section 4(1) of the Land Acquisition Act, 1894, only indicated the intention to acquire land and did not by itself complete acquisition. Deprivation of possession was not treated as equivalent to acquisition, and the record did not establish that the deceased had been divested of ownership before death. On the facts accepted by the Court, the deceased continued to be the owner of the land on the date of death and, as owner, had the right to receive compensation.
Conclusion: The deceased was the owner of the land on the date of death and had the right to receive compensation at that time.
Issue (ii): Whether the compensation awarded after death was includible in the deceased's estate for estate duty purposes.
Analysis: Since the deceased remained the owner at death and was entitled to compensation, the later determination of the exact compensation amount did not alter the nature of the asset for estate duty purposes. The amount represented a right attached to the estate as it stood on the date of death and was therefore liable to be included in the estate.
Conclusion: The compensation was includible in the deceased's estate.
Final Conclusion: The reference was answered in favour of the Revenue by holding that the deceased had the right to receive compensation on the date of death and that the compensation formed part of the estate chargeable to estate duty.
Ratio Decidendi: For estate duty purposes, compensation attributable to land owned by the deceased on the date of death is includible in the estate even if the precise amount is determined later, provided the deceased had an enforceable right to receive it at death.
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