Vesting of acquired land requires possession; without it, ownership and wealth-tax exemption continue on the valuation date.

Acquired land does not vest absolutely in the Government until possession is taken by the Collector; failure to apply that settled rule can constitute a mistake apparent from the record and justify rectification. On the valuation date, where possession had not been taken, the assessee continued to own the agricultural land for wealth-tax purposes and remained entitled to exemption under section 5(1)(iva). The land could not be treated merely as a right to compensation on that date, so the exempt treatment applied and the assessment was amended in the assessee's favour.

---

---

Issues: (i) Whether the Tribunal's earlier order contained a mistake apparent from the record in not applying the settled law on vesting under the Land Acquisition Act, 1894; (ii) whether, on the valuation date, the assessee continued to own agricultural land so as to remain entitled to exemption under section 5(1)(iva) of the Wealth-tax Act, 1957.

Issue (i): Whether the Tribunal's earlier order contained a mistake apparent from the record in not applying the settled law on vesting under the Land Acquisition Act, 1894.

Analysis: The land had been acquired, but possession had not been taken by the Collector on the valuation date. The settled principle is that acquired land vests absolutely in the Government only after possession is taken. Failure to follow the binding law declared by the Supreme Court amounts to a mistake of law apparent from the record and is within the scope of rectification.

Conclusion: Yes. The earlier order suffered from a mistake apparent from the record and was liable to rectification.

Issue (ii): Whether, on the valuation date, the assessee continued to own agricultural land so as to remain entitled to exemption under section 5(1)(iva) of the Wealth-tax Act, 1957.

Analysis: Since possession had not been taken by the Collector by the valuation date, the assessee had not been divested of title and continued to remain the owner of the agricultural land. The value of that land was below the statutory exemption limit, and the asset could not be treated merely as a right to compensation on that date.

Conclusion: Yes. The assessee was entitled to exemption and the amount of Rs. 2 lakhs was directed to be deleted from the assessment.

Final Conclusion: The rectification application succeeded, the Tribunal's earlier view was corrected, and the assessment was modified in the assessee's favour by treating the agricultural land as exempt on the valuation date.

Ratio Decidendi: Where acquired land has not vested in the Government because possession has not been taken by the Collector, the owner continues to hold the land for tax purposes, and omission to apply binding Supreme Court law on that point constitutes a rectifiable mistake apparent from the record.

---