TaxTMI 
TaxTMI 
2005 (1) TMI 364
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....n an appeal filed before the District Judge, Hisar who vide his order dated 22-9-1990 fixed the cost of acquisition of the said land @ Rs. 100 per sq. yard and accordingly, awarded enhancement compensation alongwith interest thereon. This enhanced compensation was received by the assessee and his brother together with interest on 8-5-1991 after furnishing bank guarantee/surety bond. Against the order of the District Judge, Hisar, assessee and his brother as well as the State Government filed appeals before the Hon'ble Punjab & Haryana High Court. The appeal filed by the State Government was dismissed by the High Court whereas the appeal of the assessee was allowed by it awarding cost of acquisition @Rs. 120 per sq. yard vide order dated 24-2-1994 which resulted in further enhancement of compensation. The decision of Hon'ble Punjab & Haryana High Court was affirmed by the Hon'ble Supreme Court dismissing the appeal filed by the State Government on 22-7-1998. Meanwhile, the enhanced compensation awarded by Hon'ble & Haryana High Court @Rs. 120 per sq. yard was received by the assessee on 20-12-1995 and the Assessing Officer having reason to believe on the basis of information coming ....
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....nbsp; 4,720,503 984,622 2,852,562 1990-91 4,720,503 1,324,208 3,022,355 1991-92 4,720,503 1,663,794 3,192,148 1992-93 4,720,503 2,003,380 33,61,942 ------------------------------------------------------------------------------ 3. Aggrieved by the orders of the Assessing Officer, the assessee preferred appeals for all the years under consideration before the learned CWT(A) who di....
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....f the assessee. 8. Without prejudice to the aforesaid contentions, the learned counsel for the assessee submitted that interest receivable on compensation, in any case, was not chargeable to Wealth-tax Act as held by Hon'ble Andhra Pradesh High Court in the case of CWT v. Pachigolla Narasimha Rao [1980] 134 ITR 640. He also pointed out that the assessee having actually received the compensation alongwith interest thereon on 8-5-1991, the same was no more receivable as on 31-3-1992 i.e., the valuation date relevant to assessment year 1992-93 and thus was not includible in assessee's wealth for that year. He further submitted that the value of other assets was included in the net wealth of the assessee by the Assessing Officer for all the years under consideration on ad hoc basis and there being nothing brought on record to support the same, it is liable to be deleted. 9. The learned DR on the other hand, strongly relied on the orders of the authorities below in support of the revenue's case and submitted that the case laws relied upon by the Assessing Officer may be kept in view while deciding the issues involved in the present appeals preferred by the assessee. 10. We have....
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....y the learned counsel for the assessee are not in consonance with the legal position propounded by the Hon'ble Supreme Court in the aforesaid decisions. As such, keeping in view the said decisions of the Hon'ble Apex Court, we hold that the right to receive compensation for acquisition of land was chargeable to wealth-tax notwithstanding the fact that quantification of the same was in dispute on the relevant valuation date and the authorities below were fully justified in including the same in the net wealth of the assessee. However, there was no justification in their action in taking the value of such right @ Rs. 120 per sq. yard as finally determined as a result of subsequent judgment of Hon'ble Supreme Court delivered on 22-7-1998. As held by Hon'ble Supreme Court in the case of CWT v. Smt. Anjamali Khan [1991] 187 ITR 345, compensation payable in future has to be valued a the 'present value' i.e., the value as on valuation date which cannot be equal to the amount of compensation payable under the Land Acquisition Act and such 'present value' of the future compensation will, therefore, have to be determined on a consideration of all relevant aspects that may be put forward befo....
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....s contained in Schedule III to value the right to receive compensation, the same was not includible in the wealth of the assessee for the purpose of wealth-tax. 12. As regards the third issue involved for our consideration in the present appeal as to whether the right to receive interest on the compensation was an asset chargeable to wealth-tax, it is observed that in the case of Pachigolla Narasimha Rao, the Hon'ble Andhra Pradesh High Court has held that accrued interest is a 'property' as defined in section 2(e) of the Wealth-tax Act and it is, therefore, liable to be included as an asset for the purpose of computation of the net wealth. This view of Hon'ble Andhra Pradesh High Court has been affirmed by the Hon'ble Supreme Court in the case of CWT v. Vysyaraju Badreenarayana Moorthy Raju [1985] 152 ITR 453 while holding that interest due to the assessee but not realized was liable to be included in his net wealth on accrual basis. Although in the case of Smt. Rama Bai v. CIT [1990] 181 ITR 400, the Hon'ble Supreme Court has held that interest payable on enhanced compensation awarded under the Land Acquisition Act cannot be taken to have accrued on the date of order of the Co....