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TMI Blog1982 (4) TMI 134X X X X Extracts X X X X X X X X Extracts X X X X ..... j which has been acquired by the Government. 3. The facts briefly stated and as found out from the assessment order dated 26-3-1979 are as under : " The assessee has claimed in part 4 of the return that 'Land at Patparganj covering 82 bighas and 19 biswas of agricultural land with some structure and tube-well appurtenant thereto as exempt being agricultural land'. Perusal of the income-tax record reveal the following facts : The assessee owned the above lands and the same were acquired by the Government vide notification under section 4 and under section 6 of the Land Acquisition Act in March 1966. The assessee has received a compensation of Rs. 1,77,936.40 from the Land Acquisition Collector and a further sum of Rs. 22,856.79 from the Additional District Judge. The assessee has further preferred appeals in the Delhi High Court and has claimed a sum of Rs. 8,46,550. The assessee was further required to explain as to why the compensation already received and that claimed in appeal be not assessed to wealth-tax. The assessee's counsel, Shri R.N. Bahl, has stated that neither the amount received after the valuation date nor the amount claimed in appeal is taxable under the Act a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t agree with the contention raised on behalf of the assessee that the land passes to the Government only after the compensation is awarded. He relied upon the ratio laid down by the Hon'ble Supreme Court in the case of Pandit Lakshmi Kant Jha v. CWT [1973] 90 ITR 97. He further held that the right to receive compensation was held to be a valuable right and, hence, was liable to wealth-tax. However, he agreed with the contention that the value of land could not be enhanced by Rs. 8,46,550 because the appeals before the High Court were filed much later after the valuation date and the order of the High Court has not yet been received. He, accordingly, held that the amount of Rs. 4,53,000 being the amount of compensation awarded by the Land Acquisition Collector as well as the Additional Judge was liable to wealth-tax, although the order of the Session Court may have been received after the valuation date. He further relied upon the ratio of the Hon'ble Madras High Court in the case of M. Ranganath a Sastri v. CIT [1979] 119 ITR 488 and that of the Hon'ble Allahabad High Court in the case of CWT v. Smt. Preetilata Devi [1980] 123 ITR 382, observing that the order passed by the Land Ac ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e or else the land vests with the Government. The assessee as such contends that the award having been made on 13-11-1968, as also that the tender of payment of compensation award having been made on 12-11-1968, the earliest date that could be taken to be is the date when the assessee could claim compensation as also right to claim compensation could be one of these dates. 9. The case of the revenue is that once there are notifications under sections 4 and 6, the assessee has got a right to receive compensation and qua the assessee, no longer there exists an agricultural asset, viz., agricultural land, but the assessee has the right to receive compensation and that amount is to be included as wealth in computing the net wealth of the assessee as on the valuation date. The revenue as such contends that the total amount of compensation, viz., Rs. 12,59,343 is to be treated as the net wealth. 10. Section 4, which provides for publication of preliminary notification and powers of officers thereupon, reads as under : " (1) Whenever it appears to the appropriate Government that land in any locality is needed or is likely to be needed for any public purpose, a notification to that e ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... land was issued vide Notification No. F. 4(19)/65 L and H, dated 18-2-1966. 13. Section 6 deals with 'declaration of intended acquisition' and reads as under : " 6. Declaration that land is required for a public purpose.--(1) Subject to the provisions of Part VII of this Act, when the appropriate Government is satisfied, after considering the report, if any, made under section 5A, sub-section (2), that any particular land is needed for a public purpose, or for a company, a declaration shall be made to that effect under the signature of a Secretary to such Government or of some officer duly authorised to certify its orders and different declarations may be made from time to time in respect of different parcels of any land covered by the same notification under section 4, sub-section (1), irrespective of whether one report or different reports has or have been made (wherever required) under section 5A, sub-section (2) : Provided that no declaration in respect of any particular land covered by a notification under section 4, sub-section (1), published after the commencement of the Land Acquisition (Amendment and Validation) Ordinance, 1967, shall be made after the expiry of thr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ect of all these sections is that once the Collector makes an award under section 12 of the Land Acquisition Act, he can take possession of the land and the vesting of the land is absolute and is free from all encumbrances. 18. In proceedings under the Land Acquisition Act, the title to the land does not pass to the State as soon as an award under section 11 of the Land Acquisition Act is made or an award is filed under section 12 but it is deferred till the possession is taken under section 16. 19. A making of award under section 11 amounts to an offer from the State to the assessee vis-a-vis the amount of compensation for acquisition of property and filing the said award under section 12 makes the award finally, qua the assessee and the Government, subject to right of the parties to apply for enhanced compensation or else counter claim, as the case may be. 20. In other words, it follows that, qua the assessee, the right to receive compensation accrues only when an award under section 11 is made or else when an award is filed under section 12 and not before that date since an award under section 11 is the tender of payment of compensation and, hence, the right to receive com ..... X X X X Extracts X X X X X X X X Extracts X X X X
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