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Issues: Valuation of compensation received by assessee for acquired lands; Inclusion of enhanced compensation in net wealth for assessment years; Hazard of litigation and interest considerations in valuation.
In this judgment by the Appellate Tribunal ITAT Chandigarh, a series of cross-appeals by the assessee and the Revenue were addressed, concerning the valuation of compensation received for acquired lands over the years 1974-75 to 1979-80. The Revenue challenged the reduction allowed by the AAC in the value of the right to receive compensation, while the assessee contended that the compensation received post-litigation should not have been included in their net wealth for the relevant assessment years. The case involved the valuation of additional compensation awarded by the High Court in 1980, including interest and court fee charges. The WTO had included this amount in the net wealth of the assessee for various assessment years, with deductions for interest and court fee charges. The AAC, following the Supreme Court precedent, held that the right to receive additional compensation was an asset and proceeded to assess its value based on the guidelines outlined in a relevant case. The valuation dates ranged from 1974 to 1979, with a significant gap between the valuation dates and the actual receipt of compensation. The AAC considered the hazards of litigation and interest rates in determining the value of the right to receive compensation for each year. The AAC's valuation was challenged by both the assessee and the Revenue. The assessee argued that no valuation should have been included in their net wealth, while the Revenue contested the reduction in value allowed by the AAC. The Tribunal, after considering the events surrounding the award of compensation and the time gap between valuation dates and receipt, agreed with the AAC's assessment. It acknowledged the potential growth of the compensation if received earlier due to interest rates, and the hazards of litigation endured by the assessee. To compensate for these factors, the Tribunal proposed a reduction in the value adopted by the WTO by a certain percentage for each assessment year, considering loss of interest and hazards of litigation. The Tribunal found no merit in the assessee's argument that no value should be included in their net wealth, citing a Supreme Court decision that settled the issue against the assessee. Consequently, the appeals by the Revenue were dismissed, while those by the assessee were partly allowed.
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