1987 (8) TMI 44

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....es also. We shall, therefore, deal with the questions referred to us in R. C. No. 298 of 1982. The following three questions are referred for the consideration of this court under section 27(1) of the Wealth-tax Act : " 1. Whether the right to receive compensation in respect of Valivarthipadu agricultural lands acquired by the Government under the Land Acquisition Act is an agricultural asset ? 2. Whether the cist receivable in respect of agricultural lands in Kalipatnam estate under the Rent Reduction Act is an agricultural asset? 3. Whether the right to receive compensation in respect of agricultural lands at Rajahmundry acquired for E. S. I. hospital by the Government under the Land Acquisition Act is an agricultural asset an....

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....ment and, consequently, the character of the compensation receivable is synonymous with the character of the agricultural land itself which was the subject-matter of acquisition. We are unable to agree. The agricultural land, so far as the assessee is concerned, ceased to be his property the moment possession was taken. In law, the assessee's right to receive compensation of a sum of money in respect of that land acquired comes into existence from that date. It is, therefore, clear that from the date possession of the agricultural lands is taken, the compensation due to the assessee is a debt in his favour and is of the character of a non-agricultural asset as any other debt due to the assessee. The compensation receivable in respect of the....