Accrued right to compensation is taxable in net wealth even when compensation bonds are delivered later.

A statutory right to compensation arising on the vesting of estates under the U.P. Zamindari Abolition and Land Reforms Act, 1951 was held to be an asset capable of valuation for wealth-tax purposes. Although the compensation bonds were actually received after the valuation date, the right to receive them had already accrued when the estate vested, so its market value existed on the valuation date. The market value of the compensation bonds was therefore includible in the assessee's net wealth for the 1957-58 assessment year, and the issue was decided in favour of the Revenue.

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Issues: Whether, for wealth-tax purposes, the market value of compensation bonds receivable under the U. P. Zamindari Abolition and Land Reforms Act, 1951, but actually received after the valuation date, was includible in the assessee's net wealth for the assessment year 1957-58.

Analysis: On the abolition of the estates, the intermediary's proprietary rights ceased and a statutory right to compensation arose under the U. P. Zamindari Abolition and Land Reforms Act, 1951. The Act and the Rules provided for payment of compensation in negotiable bonds. Even though the bonds in question were received after the valuation date, the right to receive those bonds had accrued on the vesting of the estate and existed on the valuation date. That right was capable of valuation, and its market value was reflected by the value of the compensation bonds.

Conclusion: The market value of the compensation bonds of the face value of Rs. 26,27,300 was includible in the assessee's net wealth for the assessment year 1957-58, and the question was answered in favour of the Revenue.

Ratio Decidendi: Where a statutory right to receive compensation has accrued before the valuation date, its market value is includible in net wealth even if the compensatory bonds or other instruments are delivered later.

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