1984 (1) TMI 115 - AT - Wealth-tax

Issues Involved:
1. Whether the AAC erred in allowing relief of specified amounts for the assessment years under appeal.
2. Determination of the taxable status of compensation awarded by the Motor Accident Claims Tribunal and subsequent interest.

Issue-Wise Detailed Analysis:

1. Relief Allowed by the AAC:

The appeals by the Revenue challenge the AAC's consolidated order dated 30th April 1982, which allowed relief of Rs. 4,10,151, Rs. 3,32,957, Rs. 3,55,562, Rs. 3,73,366, and Rs. 89,683 for the assessment years 1969-70 to 1973-74, respectively. The core issue is whether the AAC erred in granting these reliefs based on the facts and circumstances of the case.

2. Taxable Status of Compensation and Interest:

Facts and Circumstances:
- On 14th Sept., 1964, Lt. J.P.S. Kapoor was involved in a severe accident caused by a Punjab Roadways bus, resulting in long-term unconsciousness and paralysis.
- Kapoor filed a compensation claim on 26th Nov., 1966, which was accepted by the Tribunal despite being time-barred due to his medical condition.
- The Tribunal awarded Rs. 3,96,000 as compensation on 28th May, 1968, with additional costs and interest if delayed.

Opposition and Legal Proceedings:
- The State of Punjab opposed the claim, arguing it was inordinately delayed and denying any negligence.
- The High Court, on 16th Sept., 1969, ordered the State to deposit Rs. 1,00,000, which Kapoor could withdraw upon furnishing security.
- On 7th March, 1972, the High Court rejected the State's appeal and confirmed the compensation amount.

Wealth-Tax Assessments:
- For the assessment year 1969-70, the WTO included the compensation amount in Kapoor's net wealth, which was later set aside by the AAC.
- For the assessment years 1970-71 to 1973-74, the WTO included the compensation and interest amounts in Kapoor's net wealth, which was challenged and partially overturned by the AAC.

AAC's Findings:
- The AAC held that for the assessment year 1969-70, neither the interim nor the final award fell within this year, hence the compensation was not taxable.
- For the assessment years 1970-71 to 1972-73, the interim award of Rs. 1 lakh was taxable, while the remaining Rs. 2,96,000 was taxable in the year received (1973-74).
- Consequently, the AAC provided relief for the specified amounts in each year.

Revenue's Appeal:
- The Revenue argued that the AAC erred based on the Transfer of Property Act and Supreme Court judgments in CIT vs. Chunilal V. Mehta & Sons (P) Ltd. and Mrs. Khorshed Shapoor Chenai vs. Asstt. CED.
- The Revenue contended that Kapoor had a vested right to the compensation after the Tribunal's award, making it taxable.

Tribunal's Analysis:
- The Tribunal noted that the compensation was not a vested right as the State of Punjab immediately appealed the Tribunal's decision.
- The compensation became final only after the High Court's judgment on 7th March, 1972, and the subsequent expiry of the appeal period.
- Therefore, the compensation and interest were taxable from the assessment year 1973-74 onward.

Conclusion:
- The Tribunal confirmed the AAC's orders for the assessment years 1969-70 to 1972-73.
- For the assessment year 1973-74, the Tribunal restored the interest of Rs. 89,683 as part of the net wealth along with the compensation of Rs. 3,96,000.
- The Tribunal rejected the Revenue's contention of a vested right post-Tribunal award, emphasizing that the compensation was not payable until the final settlement.

This detailed analysis ensures a comprehensive understanding of the judgment, preserving the legal terminology and significant phrases.

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