TaxTMI 
TaxTMI 
1990 (11) TMI 1
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....(in respect of which the relevant valuation dates were April 14, 1957, April 14, 1958, and April 14, 1959, respectively), the Wealth-tax Officer required the assessee to furnish particulars of the compensation due from the Government. The assessee was unable to furnish such particulars but stated that his agricultural income from the lands used to be assessed at Rs. 1,00,000 per annum and that the taxes thereon amounted to Rs. 20,000 per annum. Taking the net agricultural income at Rs. 80,000 and applying the provisions of section 17(1) of the Act, the Wealth-tax Officer estimated the compensation payable to the assessee at Rs. 3,40,000. Deducting therefrom the interim compensation already received by the assessee, the amount of compensation due to him was estimated at Rs. 3,25,600 as on April 14, 1957, Rs. 3,00,000 as on April 14, 1958, and Rs. 3,00,000 as on April 14, 1959. The assessee preferred appeals to the Appellate Assistant Commissioner contending that the compensation receivable from the West Bengal Government was not an "asset" which could be included in the net wealth of the assessee under the Wealth-tax Act. The Appellate Assistant Commissioner negatived this conten....
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....ourt in Mahatab's case [1970] 78 ITR 214 that the provisions, of the Bihar Act were different materially on this aspect from the provisions of the Bengal Act. The court, therefore, Concluded that the decision of the Calcutta High Court in Mahatab's case [1970] 78 ITR 214 should be followed. Accordingly, the High Court answered the question referred to it in the affirmative and in favour of the assessee. Aggrieved by the order of the High Court, the Commissioner of Wealth-tax has preferred these appeals. On behalf of the appellant, it is submitted that the decision of this court in Pandit Lakshmi Kant Jha's case [1973] 90 ITR 97 squarely governs the issue in the present case. In that case, the assessee was the former Maharajadhiraja of Darbhanga. For the assessment year 1957-58, the relevant valuation date for which was March 31, 1957, the Wealth-tax Officer took the view that the value of the compensation which the assessee had received in respect of its estate which had been acquired by the Government under the Bihar Land Reforms Act (Bihar Act XXX of 1950) should be included as part of the net wealth of the assessee. The amount of compensation payable to the assessee by the Go....
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....r cent. and not 65 per cent. of the amount of compensation. This court held that neither of these contentions was well-founded. After setting out the provisions of the Bihar Act, the court concluded (at page 107) : "The assessee, in our opinion, was vested with a right to get compensation immediately his land was vested in the State. Section 2(e) of the Act defines 'asset' to include property of every description, movable or immovable, but does not include certain categories of property with which we are not concerned. The word 'property', as mentioned by this court in the case of Ahmed G. H. Ariff v. CWT [1970] 76 ITR 471 is a term of the widest import and, subject to any limitation which the context may require, it signifies every possible interest which a person can clearly hold and enjoy. The definition of the 'assets' as given in section 2(e) of the Act, though not exhaustive, shows its wide amplitude and we see no reason as to why the right to receive compensation cannot be included amongst the assets of an assessee." The court then dealt with the arguments that the amount of compensation payable to the assessee had not been determined by the compensation officer by the....
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.... 231 ; AIR 1985 SC 382. We are of the opinion that the contention of the appellant is well founded. In our opinion, the decision in Pandit Lakshmi Kant Jha's case [1973] 90 ITR 97 (SC) clearly covers, the principal issue in the present case as to whether the value of the right possessed by the assesee to receive compensation for the acquisition of his lands is an asset which has to be evaluated and included in his net wealth as on the relevant valuation dates. Only two grounds have been urged before us to distinguish the earlier decision in Pandit Lakshmi. Kant Jha's case [1973] 90 ITR 97 (SC). The first is the one referred to by us earlier which has also been touched upon by the High Court. The High Court both in the present case and in Mahatab's case [1970] 78 ITR 214 (Cal) which has been followed therein, has taken the view that the provisions of the West Bengal Estates Acquisition Act and the Bihar Land Reforms Act were not similar. We have gone through the provisions of the two Acts. We consider it unnecessary to encumber this judgment by extracting the relevant provisions. Broadly speaking, the scheme under both the Acts is the same and we are unable to see any material di....
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....much wider amplitude. It not only raised the question whether there was any asset capable of inclusion in the net wealth but also the question as to whether the sums estimated by the Wealth-tax Officer on this account can be included in the net wealth of the assessee as on the relevant dates. Neither the Tribunal nor the High Court have touched upon this aspect in view of their conclusion that there was no "asset" at all capable of inclusion in the estate. Since we have come to the conclusion that the right to receive compensation in respect of the acquired lands is an asset which should be included in the net wealth, it will now become necessary to determine the second question whether the valuation of this asset at the figures taken by the Wealth-tax Officer is correct or not. This is a question which will have to be considered and decided by the Tribunal while disposing of the matter conformably to this judgment. We express no opinion on this question but would clarify an important aspect thereof which the assessee had urged before the Tribunal and which the Tribunal should keep in mind while disposing of the matter finally. As we have mentioned earlier, the Wealth-tax Officer h....