Wealth-tax valuation of land turns on the valuation date, deferred sale consideration, and proportionate valuation of retained land.

For wealth-tax purposes, the nature of land must be tested on the valuation date. Lands at S. Nos. 239 and 99 were treated as non-agricultural assets because S. No. 239 had already been agreed to be sold with possession delivered before the valuation date, while the agricultural-use claim for S. No. 99 was not pressed. S. No. 239 was valued on the basis of the final sale consideration, but with a reasonable discount for deferred receipt. S. No. 99, not ultimately acquired by the development authority, was valued on a proportionate basis consistent with the earlier valuation accepted in the assessee's own case.

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Issues: (i) whether the lands at S. Nos. 239 and 99 were agricultural lands not liable to wealth-tax for the assessment years in question; (ii) how the land at S. No. 239, agreed to be sold to the development authority, was to be valued for wealth-tax purposes; and (iii) how the land at S. No. 99, which was not ultimately acquired by the development authority, was to be valued.

Issue (i): whether the lands at S. Nos. 239 and 99 were agricultural lands not liable to wealth-tax for the assessment years in question.

Analysis: The relevant date for determining the nature of the asset was the valuation date. As regards S. No. 239, the assessee had already entered into an agreement to sell and handed over possession before the valuation date, so the land could no longer be regarded as continuing to be used for agricultural purposes. As regards S. No. 99, the assessee did not press the claim of agricultural use. The contemporaneous facts and the change in user supported treatment of both lands as non-agricultural assets.

Conclusion: The lands at S. Nos. 239 and 99 were not agricultural lands for the assessment years under consideration.

Issue (ii): how the land at S. No. 239, agreed to be sold to the development authority, was to be valued for wealth-tax purposes.

Analysis: Once the agreement to sell and delivery of possession had taken place, the assessee's real asset was the right to receive the agreed sale consideration. The final sale price became ascertainable from the subsequent events, but the amount was not immediately receivable on the valuation dates. That uncertainty justified a reasonable discount while arriving at the value on the valuation dates.

Conclusion: The land at S. No. 239 was to be valued on the basis of the final sale consideration, with a deduction by way of discounting for deferred receipt.

Issue (iii): how the land at S. No. 99, which was not ultimately acquired by the development authority, was to be valued.

Analysis: Since the land at S. No. 99 was not ultimately purchased by the development authority, it continued to remain with the assessee. For consistency, the earlier valuation accepted in the assessee's own case for the surplus lands had to be followed, and the proportionate value alone was relevant.

Conclusion: The land at S. No. 99 was to be valued on a proportionate basis in line with the earlier valuation accepted in the assessee's own case.

Final Conclusion: The appeals succeeded in part, with relief granted on valuation while the plea for agricultural-land exemption was rejected.

Ratio Decidendi: For wealth-tax valuation, the nature and value of land must be determined with reference to the valuation date, but the real asset and its deferred realizable value may be assessed by considering subsequent events, including agreed sale consideration and reasonable discount for delayed receipt.

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