Statutory compensation rights under land acquisition law can form wealth-tax assets from accrual, even while valuation is under challenge.

A statutory right to receive severance damages and solatium under the Land Acquisition Act was treated as an asset for wealth-tax purposes from the date the section 4 notification was issued, because the right arose from the acquisition scheme itself and not merely from later judicial quantification. Pending challenge to the compensation award before the Supreme Court did not extinguish that vested right or justify valuing it at nil, since quantification remained separate from accrual. The assessments were therefore to include the right in net wealth, subject to modification in accordance with the amount finally determined.

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Issues: (i) whether the right to receive damages for severance and solatium under the Land Acquisition Act accrued to the assessee on the date of the section 4 notification and could be treated as an asset for wealth-tax purposes on the relevant valuation dates; (ii) whether the pendency of the State's appeal before the Supreme Court excluded such right from the assessee's net wealth or justified its valuation at nil.

Issue (i): whether the right to receive damages for severance and solatium under the Land Acquisition Act accrued to the assessee on the date of the section 4 notification and could be treated as an asset for wealth-tax purposes on the relevant valuation dates.

Analysis: The right to receive damages for severance and solatium was held to arise from the statutory scheme of land acquisition and not as a mere fiat of the court. The damages for injury to the remaining property and the mandatory solatium under section 23 formed part of the compensation framework under the Land Acquisition Act. The Tribunal treated the right as having accrued when the notification under section 4 was issued, and not only when the Civil Judge or High Court quantified the amount.

Conclusion: The right to receive damages and solatium accrued from the section 4 notification and constituted an asset capable of inclusion in wealth.

Issue (ii): whether the pendency of the State's appeal before the Supreme Court excluded such right from the assessee's net wealth or justified its valuation at nil.

Analysis: The Tribunal held that the mere pendency of further appeal did not extinguish the assessee's right to receive the amount. Relying on the principle that a vested statutory right to compensation is property and remains an asset even if quantification is pending or disputed, it concluded that the value of the right could not be taken as nil merely because the award was under challenge. The matter, however, required modification of the assessments in accordance with the amount finally determined by the Supreme Court.

Conclusion: The pendency of the Supreme Court appeal did not bar inclusion of the right in net wealth, and the assessments were to be modified on the basis of the amount finally determined.

Final Conclusion: The dispute was resolved in favour of the Revenue, with the inclusion principle affirmed and the matter sent back for adjustment in line with the final adjudication of the compensation-related amounts.

Ratio Decidendi: A statutory right to receive compensation-related amounts under the Land Acquisition Act is an asset for wealth-tax purposes from the date the right accrues, and its inclusion is not negated merely because quantification or challenge in appeal remains pending.

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