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Issues Involved:
1. Inclusion of additional compensation in total wealth for assessment years 1964-65 to 1968-69. 2. Validity of the Commissioner's direction to reassess wealth for assessment years 1961-62 to 1963-64 based on the additional compensation claimed by the assessee. Detailed Analysis: Issue 1: Inclusion of Additional Compensation in Total Wealth for Assessment Years 1964-65 to 1968-69 The primary question in Wealth-tax Reference No. 19 of 1976 was whether the additional compensation of Rs. 5,72,892 awarded by the Civil Judge should be included in the total wealth of the assessee for the relevant assessment years. The Revenue argued that the Tribunal erred in law by holding that the Wealth-tax Officer was not justified in assessing the wealth of the assessee at the value equivalent to the compensation claimed and awarded by the Civil Judge. The Revenue's stance was based on the statutory obligation to determine the fair market value of the assets as if they were sold in the open market, as indicated by the Supreme Court in Mrs. Khorshed Shapoor Chenai v. Asstt. CED [1980] 122 ITR 21. The assessee contended that the right to additional compensation was inchoate and not a vested right until judicially determined. This argument was supported by the decisions in Topandas Kundanmal v. CIT [1978] 114 ITR 237 and Addl. CIT v. New Jehangir Vakil Mills Co. Ltd. [1979] 117 ITR 849, which were referenced by the Supreme Court in Mrs. Khorshed Shapoor's case. The court noted that the principle from Mrs. Khorshed Shapoor's case is that the right to receive compensation is quantified by the Collector and the civil court, and the award of the Collector is merely an offer. The right to compensation remains alive if the offer is accepted under protest and pursued in the civil court. The valuation of this right by the civil court does not equate to the market value of the asset for wealth-tax purposes. The assessing authority must estimate the value considering the nature of the property, marketability, and litigation hazards. Given the facts, the court recognized that the High Court had already assessed the market value by a reasoned judgment, which should be binding. However, the court acknowledged the Revenue's contention that the proper exercise for determining the fair market value was not fully attempted. Therefore, the court declined to answer the question and left it to the Tribunal to adjust the matter within eight weeks, considering the collected material and any further submissions by the parties. Issue 2: Validity of the Commissioner's Direction to Reassess Wealth for Assessment Years 1961-62 to 1963-64 In Wealth-tax Reference No. 5 of 1977, the issue was whether the Tribunal was correct in holding that the Commissioner was not justified in directing the Wealth-tax Officer to reassess the wealth of the assessee based on the additional compensation claimed. The Commissioner exercised his revisional jurisdiction to direct reassessment in line with the Wealth-tax Officer's order for the assessment year 1964-65. The Tribunal had directed that the Wealth-tax Officer could not add the additional compensation to the wealth of the assessee, particularly in light of the High Court's decision that the compensation offered by the Land Acquisition Officer was adequate. The Revenue argued that the Tribunal should not have accepted the value assessed by the Land Acquisition Officer without determining the fair market value, as required by law. The court reiterated that the principle from Mrs. Khorshed Shapoor's case requires the assessing authority to estimate the market value of the right to receive compensation, considering the litigation risks and other relevant factors. The court noted that the High Court's assessment should be binding but recognized the need for a proper exercise to determine the fair market value. Therefore, the court declined to answer the question and left it to the Tribunal to adjust the matter within eight weeks, considering the existing and any additional material provided by the parties. Conclusion The court declined to answer both questions in the references and directed the Tribunal to adjust the matters within eight weeks, considering the material already collected and any further submissions by the parties. The principle from Mrs. Khorshed Shapoor's case was emphasized, requiring the assessing authority to estimate the fair market value of the right to receive compensation, considering the nature of the property, marketability, and litigation hazards.
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