Accrued compensation and interest counted as wealth-tax assets where the claim had already crystallised on the valuation date.

For wealth-tax purposes, a presently enforceable claim to compensation is an asset even where the exact balance remains unascertained on the valuation date. The right to receive the remaining compensation under the Madras Estates (Abolition and Conversion into Ryotwari) Act had accrued, so the outstanding amount was includible in net wealth. Accrued interest on outstanding loans was also treated as part of the debt due on the valuation date and therefore formed part of the taxable asset, irrespective of the accountancy method adopted or the possibility of later non-realisation. Both issues were answered in favour of the Revenue.

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Issues: (i) Whether the unascertained balance of compensation payable under the Madras Estates (Abolition and Conversion into Ryotwari) Act, XXVI of 1948 could be included in the assessee's net wealth; (ii) Whether interest accrued on outstanding loans on the valuation date was includible in the assessee's net wealth.

Issue (i): Whether the unascertained balance of compensation payable under the Madras Estates (Abolition and Conversion into Ryotwari) Act, XXVI of 1948 could be included in the assessee's net wealth.

Analysis: The right to compensation had already accrued to the assessee on the valuation date, though the final figure had not yet been determined. A present liability to pay money, even if the exact amount is to be ascertained in future, constitutes a debt in law and is an asset for wealth-tax purposes. The interim payment received did not alter the character of the remaining compensation as a legally enforceable claim.

Conclusion: The amount was includible in the assessee's net wealth and the issue was decided against the assessee.

Issue (ii): Whether interest accrued on outstanding loans on the valuation date was includible in the assessee's net wealth.

Analysis: Interest accruing up to the valuation date forms part of the debt due to the assessee and therefore enhances the value of the asset for wealth-tax computation. The method of accountancy or the possibility of later non-realisation of the principal did not prevent accrued interest from being treated as part of the taxable asset on the relevant date.

Conclusion: The accrued interest was properly includible in the assessee's net wealth and the issue was decided against the assessee.

Final Conclusion: Both questions were answered in favour of the Revenue, and the references were disposed of accordingly with costs.

Ratio Decidendi: For wealth-tax purposes, a presently enforceable claim to money is an asset even if the exact amount is to be quantified later, and interest that has accrued on the valuation date forms part of the value of the debt to be included in net wealth.

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