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TMI Blog1993 (1) TMI 33X X X X Extracts X X X X X X X X Extracts X X X X ..... . Whether, on the facts and in the circumstances of the case, the Tribunal was right in law in holding that the value of 3,851 fruit-bearing trees on the land as determined by the authorities was excessive and that they should be valued afresh as fuel wood and not as fruit-bearing trees?" (at the instance of the Revenue) The same Bench referred an additional question (Wealth-tax Reference No: 109 of 1989) in pursuance of an order of the High Court dated May 26, 1988, under section 27(3) of the Act, in the following terms : "4. Whether, on the facts and in the circumstances of the case, the finding of the Appellate Tribunal regarding valuation of land is based on irrelevant considerations after rejection of relevant and admissible material on the record and is arbitrary and perverse ?" (at the instance of the Revenue) All the questions have arisen out of the decision of the Appellate Tribunal dated March 14, 1977. S. Baldev Inder Singh filed a return of his wealth under the Act as an individual on July 28, 1973, for the assessment year 1970-71. The valuation date was March 31, 1970. The assets included in the return, inter alia, comprised land measuring 542 kanals 19 marlas. T ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sessee in which 3,851 fruit bearing trees were standing . The Wealth-tax Officer took the fuel value of the said trees as well as its yearly fruit-bearing capacity into consideration for estimating the value of those trees. The Appellate Assistant Commissioner affirmed the finding of the Wealth-tax Officer. The Appellate Tribunal reversed the finding of the authorities below and held that the value of the trees to be taken into consideration was only as fuel wood and, in order to determine the value, directed the matter to be remitted to the Wealth-tax Officer. Another asset included in the return was land described as urban and suburban in the revenue estate of Gumtala situated on the outskirts of the city of Amritsar. The Wealth-tax Officer took into consideration the situation of the land, its proximity to developed and fashionable localities of Amritsar, some instances of other sales in nearby localities and the amount paid as compensation by the Improvement Trust for acquisition of land situated nearby and came to the conclusion that the value of the land should be estimated at the rate of Rs. 9 per square yard. The Appellate Assistant Commissioner affirmed this finding. The ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... substantially similar circumstances as in the present case, the wealth-tax authorities took a certain percentage of the face value of the compensation receivable by the assessee on account of compulsory acquisition of his land. This was approved by a Full Bench of the Patna High Court in the decision reported as Maharaj Kumar Kamal Singh v. CWT [1972] 84 ITR 240. The above decision was approved by the Supreme Court in CWT v. Maharaja Kumar Kamal Singh [1984] 146 ITR 202. Section 7 of the Act provides that the value shall be estimated to be the price which, in the opinion of the Wealth-tax Officer, it would fetch if sold in the open market on the valuation date. The crucial test is the price which a willing purchaser would pay for buying the said asset in the open market. The fact that the amount of compensation is not payable at once but is deferred over a number of years would affect the value of the asset on the valuation date. To what extent that would affect the value of the asset is a matter of quantification. We are not concerned with that question. It will be for the authorities under the Act concerned to go into and determine that question. The face value of the claim is re ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ssee had made representations dated March 19, 1973, and June 7, 1973. In the former representation, he had concluded by saying that he was ready to accept compensation at the rate of Rs. 16 per square yard for the whole of the acquired land and, in the latter representation, he had claimed compensation at a rate more than Rs. 15 per square yard, which had been awarded by the Land Acquisition Tribunal, Amritsar, in respect of land which, according to the assessee, was inferior in nature. The said compensation awarded by the Tribunal was besides an additional 15 per cent. solatium. (3) The Improvement Trust auctioned land at rates varying from Rs. 150 to Rs. 170 per square yard in the months of February and January, 1973, respectively. On the basis of this material, the Wealth-tax Officer came to a tentative conclusion that the rate for the land for the assessment year 1970-71 should be Rs. 9 per square yard. It was put to the assessee in writing and the assessee was heard on this aspect of the matter. (4) The Improvement Trust, vide its majority resolution No. 465 dated September 15, 1973, decided to recommend to the Land Acquisition Officer rates varying from Rs. 12 to Rs. 7 per ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ber 3, 1973. As against the above material, the Appellate Tribunal pointed out that the Amritsar Improvement Trust had acquired almost the entire land in dispute, vide award dated October 3, 1973, and the Trust had determined the value of the assessee's land with reference to the relevant date, namely, January 21, 1972, at the rate of Rs. 5 per square yard for urban area and Rs. 4 per square yard for suburban area. It was rightly pointed out by the Appellate Tribunal that the Wealth-tax Officer as also the Appellate Assistant Commissioner had relied on various awards of the Land Acquisition Collector with regard to other parcels of land acquired by the Improvement Trust in the vicinity of the land in dispute. The Appellate Tribunal appears to have taken the view that the award dated October 3, 1973, related to the land in dispute itself and had been given after the valuation date, i.e., March 31, 1970. It also took notice of the fact that there had been an upward rise in the prices of land with the passage of time. In this view of the matter, the Appellate Tribunal took the rate of Rs. 5 per square yard on the valuation date even though that was the rate given in the award dated O ..... X X X X Extracts X X X X X X X X Extracts X X X X
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