1981 (3) TMI 109 - AT - Income Tax

Summary

Issues Involved:
1. Inclusion and valuation of agricultural lands in the estate of the deceased.
2. Impact of the ceiling order and pending writ petition on the valuation of the land.
3. Determination of compensation for surplus land under the Ceiling Acts.

Issue-wise Detailed Analysis:

1. Inclusion and Valuation of Agricultural Lands in the Estate of the Deceased:
The accountable person appealed against the order of the Appellate Controller of Estate Duty (Appl. CED) regarding the estate duty assessment of the deceased's estate. The deceased owned 365 bighas of agricultural land, which was included in the estate valuation. The Assistant Controller of Estate Duty (Asstt. CED) valued the irrigated land at Rs. 1200 per bigha and the unirrigated land at Rs. 600 per bigha. The Appl. CED confirmed the inclusion of the land but reduced the valuation to Rs. 2,09,800 from Rs. 2,51,760.

2. Impact of the Ceiling Order and Pending Writ Petition on the Valuation of the Land:
The accountable person contended that the Asstt. CED wrongly included the value of all the land in the deceased's name due to a ceiling order determining surplus land. The order, passed by the SDM under the Agricultural Ceiling Act of 1973, was challenged in a writ petition pending before the High Court. The High Court had stayed the order, preventing the possession of surplus land from being transferred to the government. Despite this, the Appl. CED upheld the inclusion of the land, noting the deceased's possession at the time of death.

3. Determination of Compensation for Surplus Land under the Ceiling Acts:
The accountable person argued that the land declared surplus should be valued based on the compensation payable under the Ceiling Acts, not at full market value. The compensation was to be determined as per the Rajasthan Tenancy Act, 1955, and the Rajasthan Imposition of Ceiling on Agricultural Holding Act, 1973. The Appl. CED did not consider this argument, maintaining the valuation based on the deceased's ownership at the time of death.

Judgment Analysis:
The Tribunal acknowledged that the agricultural land could not be valued without considering the ceiling law and the order passed under it. The order of the SDM, though stayed, indicated that certain proceedings under the ceiling law had been initiated. The Rajasthan High Court had ruled that proceedings under the old law would continue, and the rights of the State and liabilities of the landholder would be governed by the provisions of the old law. The Tribunal emphasized that the value of the land should reflect the compensation payable under the ceiling law, considering the probable time before such compensation is received.

Conclusion:
The Tribunal set aside the lower authorities' orders, directing the Asstt. Controller to re-determine the value of the agricultural lands. The valuation should consider the rights of the State and the liabilities of the landholder under the Ceiling Acts, distinguishing between surplus and non-surplus land. The appeal was treated as allowed for statistical purposes.