1990 (7) TMI 166 - AT - Wealth-tax

Summary

Issues:
1. Inclusion of additional compensation in the net wealth of the assessee for the assessment year 1977-78.
2. Request for rectification of the Tribunal's order and the Miscellaneous Applications filed by the assessee.
3. Applicability of judgments by the Supreme Court in similar cases.
4. Interpretation of the right to receive compensation and its valuation under the Wealth Tax Act.

Analysis:

Issue 1:
The Tribunal included additional compensation in the net wealth of the assessee based on the concession made by the counsel, rejecting the argument that the compensation had not crystallized by the valuation date. The Tribunal held that the compensation was to be included as it was not open for the assessee to deduct the amount from taxable wealth. The assessee's subsequent applications for rectification were rejected by the Tribunal, leading to the filing of a petition in the High Court.

Issue 2:
The High Court directed the Tribunal to pass a speaking order and provide an opportunity for the assessee to be heard on the Miscellaneous Applications. The assessee argued that the compensation amount should not be included in net wealth as it had not crystallized by the valuation date, citing a Supreme Court judgment. The Departmental Representative contended that the right to receive compensation is a property and should be valued by the WTO based on the date of notification and subsequent valuation dates.

Issue 3:
The assessee relied on a Supreme Court judgment regarding the non-includibility of additional compensation in net wealth, while the Departmental Representative referred to a different judgment emphasizing the valuation of the right to receive compensation. The Tribunal concluded that the judgment cited by the assessee was not applicable to the case, and the value of the right to receive compensation should be determined based on the date of notification and subsequent valuation dates.

Issue 4:
The Tribunal held that the value of the right to receive compensation should be evaluated based on the market value on the date of the relevant notification and subsequent valuation dates. The Tribunal emphasized that the compensation amount awarded in 1982 related back to the date of notification in 1965 and was available to the assessee on all relevant valuation dates. The Tribunal rejected the applications seeking rectification, stating that the inclusion of the compensation amount in the net wealth was lawful and no mistake was apparent from the record.