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Valuation of asset for estate duty - Introduction of theory of risk in valuation - Reduction of amount due to risk factor. Analysis: The case involved the valuation of an acquired land for estate duty purposes. The main issue was whether a further deduction on account of risk was justified after determining the value of the asset using Parks' formula or relevant valuation principles. The court examined the circumstances surrounding the valuation of the right to receive compensation for the acquired land. The deceased owned land acquired by the government, and the compensation amount was in dispute due to litigation with protected tenants. The valuation of the right to receive compensation was crucial for estate duty assessment. The court considered previous rulings emphasizing that the risk of litigation and uncertainties must be factored into the valuation process. The court referred to the Supreme Court's decision in Khorshed Shapoor Chenai case, highlighting that the estimated value cannot be below the amount awarded by the Collector, considering the risks of litigation. The court also cited other cases where the value of the right to receive compensation was subject to disputes and uncertainties, impacting the valuation process. The court concluded that there is no fixed rule for valuing the right to receive compensation and that the risk of litigation must be considered. In this case, the court found the Tribunal's decision to allow a 20% discount on the value reasonable due to the hazards of litigation and the time delay in finalizing the compensation amount. The court emphasized the importance of considering all relevant factors, including the uncertainties and risks involved in determining the market value of the right to receive compensation. Ultimately, the court ruled in favor of the assessee, upholding the Tribunal's decision to apply a discount based on the risk factors involved. The court emphasized the need to account for uncertainties and delays in the valuation process, especially in cases where the final compensation amount is not determined at the time of the deceased's death.
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