1980 (2) TMI 33 - HC - Wealth-tax

Summary

Issues Involved:
1. Relatability of enhanced compensation to the original right from acquisition.
2. Inclusion of extra compensation in net wealth prior to its final determination.
3. Justification of the Tribunal's valuation at 50% of compensation for specific assessment years.
4. Inclusion of accrued interest in the net wealth of the assessee.

Summary:

Issue 1: Relatability of Enhanced Compensation to Original Right
The court examined whether the enhanced compensation amount of Rs. 4,09,300 awarded by the City Civil Court and upheld by the High Court is relatable to the original right from the acquisition. The court affirmed that the enhanced compensation is indeed related to the original right which flowed from the acquisition.

Issue 2: Inclusion of Extra Compensation in Net Wealth Prior to Final Determination
The court addressed whether the extra compensation should be included in the net wealth of the assessee on the relevant valuation dates prior to April 15, 1967. It was concluded that the enhanced compensation amount could not be included in the net wealth of the assessee for the assessment years 1960-61 to 1962-63 as the amount was neither determined nor paid by those dates.

Issue 3: Justification of the Tribunal's Valuation at 50% of Compensation
The Tribunal's decision to fix the value of the right to receive compensation at 50% of Rs. 2,74,454 for the assessment years 1960-61 to 1962-63 and 50% of the enhanced compensation for the assessment years 1963-64 to 1970-71 was upheld. The court reasoned that the Tribunal rightly considered the litigation risks and the time involved in receiving the compensation, making the 50% valuation reasonable.

Issue 4: Inclusion of Accrued Interest in Net Wealth
The court held that the entire amount of compensation together with interest accrued could not be included in full in the net wealth of the assessee on the relevant valuation dates. The Tribunal's assessment of including only 50% of the interest accrued was deemed appropriate.

Conclusion:
The court answered all questions in favor of the assessee and against the revenue, affirming the Tribunal's valuation approach and excluding the full amount of compensation and interest from the net wealth for the relevant assessment years. No costs were awarded, and the advocate's fee was set at Rs. 250.