Jagannatha Shetty, J.
1. The question referred for the opinion of this court under s. 27(1) of the W.T. Act, 1957, reads :
'Whether, on the facts and in the circumstances of the case, the Appellate Tribunal was justified in holding that the assessee's claim for higher compensation in respect of acquisition of property is not an asset and, therefore, not a part of an assessee's wealth as on the valuation date under the Wealth-tax Act, 1957 ?'
2. Briefly stated, the facts behind the legal formulation are as follows :
3. The assessee's property situated at No. 2, Cubbon Lodge, Bangalore, was acquired for the purpose of the All India Radio. Under the award made by the Land Acquisition Officer, the assessee was entitled to and also received the sum of Rs. 18,49,837 by way of compensation. Being dissatisfied with the award, the assessee sought a reference to the civil court claiming enhanced compensation of Rs. 52,50,000. The reference was made and the assessee filed return of his wealth for the year 1973-74 on the basis of the award amount received by him. The WTO did not accept the return. He treated the assessee's claim itself as the wealth for determining the wealth-tax.
4. Against the said order, the assessee appealed to the AAC. It was urged in the appeal that the charge of wealth-tax should be on the net wealth and not on the claim for enhanced compensation. The assessee in support of the contention depended upon the definition of the term 'net wealth' as defined under s. 2(m) of the Act. This contention was accepted by the AAC and he deleted the addition of Rs. 34,00,163 from the net wealth.
5. Against the said order, the Department appealed to the Tribunal and the assessee preferred a cross-objection. The Tribunal affirmed the order of the AAC and dismissed the appeal and, consequently, it did not find it necessary to examine the contention raised in the cross-objection. The Tribunal, however, at the instance of the Department, has referred the aforesaid question for the opinion of this court with the statement of the case.
6. The Tribunal in this case has observed that the 'net wealth' as defined under s. 2(m) of the Act should not be equated with the claim of the assessee for enhanced compensation. It has further observed :
'By any stretch of imagination can it be said that what the assessee had claimed as the compensation to be awarded and which is much more than the compensation actually awarded, is the net wealth of the assessee during the year as on the valuation date.'
7. Plainly, the view taken by the Tribunal appears to be not correct. The Tribunal could not have altogether disregarded the claim of the assessee for higher compensation in respect of the property acquired. Such claim is capable of estimation and there should be a proper estimation on the basis of the nature of the property, the marketability and the surrounding circumstances including the risk of litigation, if any, concerned with the property.
8. In Mrs. Khorshed Shapoor Chenai v. Assistant Controller of Estate Duty : 122ITR21(SC) , the Supreme Court dealing with a similar question under the E.D. Act, has observed (p. 22) :
'In the case of the right to receive compensation, which is property, the estimated value can never be below the figure quantified by the Collector because under s. 25(1) of the Land Acquisition Act the Civil Court cannot award any amount below that awarded by the Collector; the estimated value can be equal to the Collector's award or more but can never be equal to the tall claim made by the claimant in the reference nor equal to the claim actually awarded by the Civil Court inasmuch as the risk or hazard of litigation would be a detracting factor while arriving at a reasonable and proper value of this property as on the date of the deceased's death. The assessing authority will have to estimate the value having regard to the peculiar nature of the property, its marketability and the surrounding circumstances including the risk of hazard of litigation looming large at the relevant date.'
9. These observations are clearly applicable to the case on hand.
10. We may only state that the value - to be estimated, cannot in any event be equal to the compensation awarded by the Land Acquisition Officer. Nor it could be equal to the fantastic claim made by the owner in the reference application. The Tribunal, however, must determine the estimated value as per the guidelines indicated by the Supreme Court in Mrs. Khorshed's case : 122ITR21(SC) .
11. For the reasons stated above, we answer the question in the negative and against the assessee. We direct the Tribunal to rehear the appeal and dispose of the same in the light of the observations made and as per the principles laid down by the Supreme Court in Mrs. Khorshed shapoor Chenai's case : 122ITR21(SC) .