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Wealth-tax Officer Vs. Pabitra Kr. Barua - Court Judgment

LegalCrystal Citation
CourtIncome Tax Appellate Tribunal ITAT Guwahati
Decided On
Judge
Reported in(1983)5ITD420(Gau.)
AppellantWealth-tax Officer
RespondentPabitra Kr. Barua
Excerpt:
.....relevant valuation dates, i.e., 31-3-1967, 31-3-1968, 31-3-1969, 31-3-1970 and 31-3-1971.3. the assessee filed appeals before the aac who reduced the addition by rs. 1,79,124 on the ground that the compensation money awarded as the cost of the land was only rs. 13,42,320. the balance was on account of 15 per cent solatium amounting to rs. 2,01,348 and interest amounting to rs. 7,41,166. this amount could not be included in the assessee's wealth and, consequently, the assessee's share therein was excluded.4. the five appeals have been filed by the department against this exclusion by the aac and the five cross-objections have been filed by the assessee wherein it has been alleged that all his grounds of appeal were not considered by the aac. it has been contended that the assessment.....
Judgment:
1. All these ten matters involve a common dispute and are, therefore, disposed of by this single order.

2. The facts leading to this dispute are that the assessee was owner of one-fifth share of land measuring 95 bighas, 4 kathas, 11 lechas which was acquired by the Government for setting up railway marshalling yard on 31-10-1960. Some compensation was ordered to be paid regarding which the assessee agitated and ultimately on 22-11-1977, the arbitrators awarded a sum of Rs. 22,37,874. According to the WTO, the assessee's interest in this awarded amount came to Rs. 4,47,574. He, accordingly, included this amount in the assessee's net wealth on the relevant valuation dates, i.e., 31-3-1967, 31-3-1968, 31-3-1969, 31-3-1970 and 31-3-1971.

3. The assessee filed appeals before the AAC who reduced the addition by Rs. 1,79,124 on the ground that the compensation money awarded as the cost of the land was only Rs. 13,42,320. The balance was on account of 15 per cent solatium amounting to Rs. 2,01,348 and interest amounting to Rs. 7,41,166. This amount could not be included in the assessee's wealth and, consequently, the assessee's share therein was excluded.

4. The five appeals have been filed by the department against this exclusion by the AAC and the five cross-objections have been filed by the assessee wherein it has been alleged that all his grounds of appeal were not considered by the AAC. It has been contended that the assessment orders were bad in law as well as on facts and the entire addition of Rs. 4,47,574 ought to be deleted.

5. We have heard the representatives of the parties at length in all these matters. So far as the departmental appeals are concerned, if the assessee's representative had actually conceded before the AAC that the amount of compensation awarded to the assessee was liable to be included in his net wealth, then obviously the amount of interest and solatium would also be liable to be similarly included, because if the compensation money belonged to him, naturally lie was entitled to interest as well as solatium payable to him on account of compulsory acquisition which took place as early as 1960. It was, however, argued on behalf of the assessee that his representative had never conceded that the amount of compensation awarded by the arbitrators could at all be considered for the purpose of being included in the assessee's net wealth. According to the assessee, the award was given on 22-11-1971, which was after all the valuation dates in question, and, therefore, any amount awarded by the arbitrators could not be included in the assessee's net wealth. There appears to be force in this contention and the representative of the revenue had not much to say in this behalf.

His only reliance was upon a judgment of the Hon'ble Supreme Court in Pandit Lakshmi Kant Jha v. CWT [1973] 90 ITR 97. However, all that has been held therein was that even if compensation for acquisition of land is not payable immediately and spread over a period of 40 years, that may be relevant for the purpose of evaluating the right to compensation. However, the right to receive compensation was property and as such assessable for the purpose of the Wealth-tax Act, 1957 ('the Act'). There is no dispute over the principle laid down in this case, but the compensation amount had already been determined before the same was sought to be included in the net wealth of the assessee in the said case. In fact, the WTO had estimated the valuation of the assessee's interest for the compensation amount at 75 per cent of the face value. In the present case, the amount of compensation was determined after all the valuation dates and, therefore, it cannot be taken for granted that the entire amount so determined was liable to be included in the net wealth of the assessee. According to the assessee's representative, the AAC had incorrectly recorded his admission and, therefore, the order of the AAC should be set aside.

6. Apart from this, it was argued on behalf of the assessee that all the assessments in question were time-barred and a plea regarding this was taken in first ground of appeals before the AAC which was never given up. It was contended that according to Section 17A of the Act, no order of the assessment could be passed after four years from the end of the assessment year in which the net wealth was first assessable.

These assessments relate to the years 1967-68 to 1971-72; whereas the assessments were made on 7-2-1980, which was long after. According to the departmental representative, the returns of wealth for the last four years were filed on 29-3-1979 and the assessments were made within one year of the filing of the returns and were, therefore, in time keeping in view the provisions of both the Clauses (a) and (b) of Section 17A(1), according to which the same can be made either within four years from the end of the assessment year in which the net wealth was assessable or one from the date of the filing of the return or a revised return under Section 15 of the Act, whichever is later. The assessee's contention in this behalf was that the assessee was not bound to file a return under Section 17(1)(a) or (b) after the expiry of four years from the end of the assessment years in question and any returns filed by him thereafter would be invalid and could not confer jurisdiction upon the WTO to make the assessments accordingly.

7. After carefully considering all the facts and circumstances of the case, we are of the opinion that although the WTO may not be entitled to call for the returns from the assessee under Clause (a) or (b) of Section 17(1), but there was no bar upon the assessee to file these returns because under Section 15, if any person has not furnished any return within the time allowed under Section 14 of the Act, he may furnish a return at any time before the assessment is made. It is nobody's case that the assessments had already been made for these years. Therefore, there was no bar to the assessee to file voluntary returns and upon the WTO to make the assessments. Consequently, the assessments for the years 1968-69 to 1971-72 were quite valid in law.

8 to 10. [These paras are not reproduced here as they involve minor issues].

11. In the result, the departmental appeals as well as the cross-objections filed by the assessee are allowed for statistical purposes.


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