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Commissioner of Wealth-tax Vs. Smt. Preetilata Devi - Court Judgment

LegalCrystal Citation
SubjectDirect Taxation
CourtAllahabad High Court
Decided On
Case NumberWealth-tax Reference No. 661 of 1975
Judge
Reported in(1980)17CTR(All)69; [1980]123ITR382(All); [1980]3TAXMAN586(All)
ActsWealth Tax Act, 1957 - Sections 7; Land Acquisition Act, 1894 - Sections 11
AppellantCommissioner of Wealth-tax
RespondentSmt. Preetilata Devi
Appellant AdvocateR.K. Gulati and ;A. Gupta, Advs.
Respondent AdvocateA.N. Mahajan, Adv.
Excerpt:
- .....that some agricultural land belonging to the assessee was acquired by the state govt. under the land acquisition act. the relevant notification was issued on 7th december, 1961, and the govt. took possession on 7th march, 1962. the assessee claimed compensation. the land acquisition officer by an order dated 9th may, 1963, determined the compensation payable at rs. 98,430. the assessee applied for a reference. the learned civil & sessions judge on 29th september, 1964, determined the compensation payable at rs. 2,92,690 in addition to the amount already awarded by the land acquisition officer, viz., rs. 98,430. on 28th february, 1968, the assessee filed her returns under the w.t. act for the assessment years 1964-65, 1965-66 and 1966-67. in all the three returns she showed the value.....
Judgment:

Satish Chandra, C.J.

1. It appears that some agricultural land belonging to the assessee was acquired by the State Govt. under the Land Acquisition Act. The relevant notification was issued on 7th December, 1961, and the Govt. took possession on 7th March, 1962. The assessee claimed compensation. The Land Acquisition Officer by an order dated 9th May, 1963, determined the compensation payable at Rs. 98,430. The assessee applied for a reference. The learned Civil & Sessions Judge on 29th September, 1964, determined the compensation payable at Rs. 2,92,690 in addition to the amount already awarded by the Land Acquisition Officer, viz., Rs. 98,430. On 28th February, 1968, the assessee filed her returns under the W.T. Act for the assessment years 1964-65, 1965-66 and 1966-67. In all the three returns she showed the value of the asset which was represented by the compensation awarded to her at Rs. 98,430. The WTO rejected the returned amount holding that the correct value of the asset was Rs. 98,430 plus Rs. 2,92,690, the additional amount awarded by the Civil & Sessions Judge. This view was upheld by the AAC. The assessee went up in appeal before the Tribunal.

2. For the subsequent two years, viz., 1965-66 and 1966-67, for which the valuation dates were 27th October, 1964 and 27t October, 1965, respectively, the Tribunal held that the higher amount was liable to be treated as the value of the asset, viz., the compensation payable for the acquired property, but for the assessment year 1964-65 the compensation which could be included in assessee's net wealth was the amount determined by the Land Acquisition Officer, because the Tribunal took the view that the assessee actually received the additional amount awarded by the Civil & Sessions Judge on 3rd December, 1966, and till then the award was only a notional one, which was in dispute before the High Court in an appeal filed by the Govt.

3. The Tribunal has submitted this statement of the case and referred the following question of law for our opinion :

' Whether, on the facts and in the circumstances of the case, the valuation of the property in dispute for purposes of the wealth-tax should be taken as originally assessed in the award or should be taken as the valuation eventually fixed by the Civil & Sessions Judge '

4. Under the Land Acquisition Act the valuation of the acquired property is determined with reference to the date of notification under Section 4 of the Land Acquisition Act vide Section 11. The value of the acquired asset, thus, being fixed with reference to the date of notification, the difference of opinion as to the actual determination of the amount will make no material difference with reference to the different assessment years, since on the valuation dates the asset was the compensation payable for the acquired property, and since the compensation was payable in terms of money, there was no question of its value fluctuating with reference to various valuation dates corresponding to different assessment years.

5. In our case the question referred to us relates to assessment year 1964-65, for which the relevant valuation date was 27th October, 1963. On this date the value of the asset, viz., the amount of compensation, was the amount determined as payable to the assessee for the acquired property with reference to the value of that property on 7th December, 1961, the date of notification under the Land Acquisition Act, and that amount alone represented the value of the asset liable to be returned under the W.T. Act. On 27th October, 1963, the only value in operation was the amount determined by the Land Acquisition Officer, viz., Rs. 98,430, but on the date when the assessee filed the return viz., 28th February, 1968, the Civil & Sessions Judge's judgment has come into existence. The order of the Civil & Sessions Judge superseded and supplanted the determination made by the Land Acquisition Officer. In the eye of law the order passed by the Land Acquisition Officer merged in the order of the Civil & Sessions Judge with the result that the legally recognized amount of compensation was Rs. 98,430 plus Rs. 2,92,690. That being the operative and enforceable amount of compensation payable to the assessee, the same was liable to be entered in the return under the W.T. Act when the assessee filed the same on 28th February, 1968. The fact that the learned Civil & Sessions Judge's order was passed on 3rd May, 1976, viz., much after the relevant valuation date, which was 27th October, 1963, is neither material nor relevant because the assessee, in fact, filed the return on 28th February, 1968, a date when the learned Civil Sessions Judge's order had already come into existence. In our opinion, the assessee was bound to return the amount of compensation determined by the Civil & Sessions Judge's order, for the assessment year 1964-65.

6. In the result, we answer the question referred to us by holding that the valuation of the property for purpose of wealth-fax should be taken as the valuation eventually fixed by the learned Civil & Sessions Judge.

7. The Commissioner will be entitled to costs which are assessed atRs. 200.


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