TaxTMI 
TaxTMI 
2006 (2) TMI 148
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....ed in the net wealth of the assessee?" The facts of the case in brief are as follows: The present reference relates to the assessment year 1973-74. The assessee was the owner of a factory known as Bimal Glass Works which he sold on May 26, 1991, to M/s. Sri Veer Industries, Delhi, for a sum of Rs. 10,50,000. As agreed upon, out of the total sale consideration a sum of Rs. four lakhs was received in cash at the time of execution of the sale deed and balance of Rs. 6,87,000 (including the interest thereon) was to be paid to the assessee in instalments subsequently. The Collector, Agra, after the aforesaid sale deed, proceeded to sell the assets/properties of M/s. Shri Veer Industries on account of arrears of the sales tax due agai....
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....e relevant assessment year. The Wealth-tax Officer added a sum of Rs. 2,08,000 (the sum received by the assessee towards interest and deposited in the bank under the orders of the court). The assessee challenged the addition of the aforesaid amount in his hands by filing appeal. The first appellate authority did not accept the contention of the assessee on the ground that for all practical purposes the said sum was an "asset" at the hands of the assessee within the meaning of the Wealth-tax Act. The Income-tax Appellate Tribunal, however, in second appeal accepted the contention of the assessee and deleted the addition of Rs. 2,08,000 in the hands of the assessee on the ground that the assessee did not acquire any title on the ground ....
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....ribunal directed the Wealth-tax Officer in the assessment year 1957-58 to make enquiries about the financial position of the vendee, its version about the assessee's claim, the value of the property in question and about the fate of the orders passed in several litigations between the assessee and the vendee and the Collector of Agra. The Wealth-tax Officer, however, as noted in the order of the Tribunal in appeal failed to make proper enquiries in accordance with the directions of the Tribunal and failed to contact the vendee company in order to enquire about the position of the compromise and the objection of Sri R. K. Jain and also failed to point out the final outcome of the dispute between the assessee vis-a-vis, the Collector, Agra, a....
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....ceased to have any right, title or interest in the property sold, except the lien for the unpaid amount which is also disputed. The Appellate Assistant Commissioner as well as the learned senior counsel laid much emphasis on the fact that the Collector awarded the compensation in the land acquisition proceeding in the name of the assessee and as such for all practical purposes the assessee became the owner of the property and as such the interest accrued on the compensation amount is liable to be included in the net assets of the assessee. The said argument, in our opinion is untenable in law. The subsequent delivery of possession in the absence of transfer of "title" by the vendee company to the assessee pending acceptance of the compro....
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....n the meaning of section 2(e)(2)(iii) of the Wealth-tax Act and the value of the same was not liable to be included in the net wealth of the assessee. The apex court has held that the continuance of the assessee was precarious in nature because it could be terminated by the lessor. On the same analogy, we are of the view that on the facts of the present case the right of the assessee to receive the compensation amount was very much sub judice and not free from doubt before the court. The entitlement or authority to receive the compensation amount was the subject matter of litigation and at that point of time the assessee had no clear legal title to receive the compensation amount inasmuch as the compromise petition was not accepted by th....