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TMI Blog1979 (12) TMI 33X X X X Extracts X X X X X X X X Extracts X X X X ..... he circumstances of the case, the Appellate Tribunal is justified in fixing the market value on the relevant valuation date at nil in respect of the assessee's right to compensation for the lands acquired by the Government under the R.A.I.P. Act, 1952 ? " The few facts necessary to appreciate how these questions arise may be briefly referred: Acs. 36.22 guntas of land situated in Hyderabad Urban Taluk belonging to the assessee who is an individual was acquired by the Collector and District Magistrate, Hyderabad, under the provisions of the Requisitioning and Acquisition of Immovable Property Act (XXX of 1952) (hereinafter referred to for short as " the R.A.I.P. Act "). The assessee laid a claim before the Collector for payment of compensa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... um of compensation receivable by the assessee as on the respective valuation date was an unascertained amount. The AAC further observed that the Government having committed itself to pay a minimum sum of Rs.21,08,304 as compensation subject to further proceedings contemplated under the R.A.I.P.Act, paid a sum of Rs. 14,05,536, and the tax payable by the assessee would be assessed on Rs. 21,08,304 and not Rs. 1,33,24,475. But at the same time, the AAC directed that the balance of tax demand be kept in abeyance pending final determination of compensation. Accordingly, he partly allowed the appeal. The assessee preferred an appeal to the Appellate Tribunal and the Appellate Tribunal held that the market value of the right to compensation was t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... assessee's wealth for the purpose of determining his wealth-tax liability. It cannot be disputed that the entire amount of compensation claimed by the assessee before the acquisition authorities under the R. A. I. P. Act cannot by itself form the basis for determining the wealth of the assessee for the relevant assessment years. The land is acquired in March, 1970, and the amount of compensation determined for that property as payable to the assessee would undoubtedly be the wealth for the relevant assessment year and if any amount is paid on or about that date that could also form the basis for assessing the wealth for that assessment year. But merely because he laid a claim for Rs. 1,33,24,475 that cannot be said to be his wealth eithe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the accountable person to pay the estate duty the Supreme Court in Civil Appeal No. 2205/72 (Mrs. Khorshed Shapoor Chenai v. Asst. CED [1980] 122 ITR 21) held thus (p. 32) : " It will be the duty of the assessing authority under either of the enactments to evaluate this property (right to receive compensation at market value on the date of relevant notification) as on the relevant date (being the date of death under the E.D. Act and valuation date under the W.T. Act). Under s. 36 of the E.D. Act the assessing authority has to estimate the value of this property at the price which it would fetch if sold in the open market at the time of the deceased's death. In the case of the right to receive compensation, which is property, where the Co ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ment. Out of that amount only 80%, i.e., Rs. 14,05,536, has been paid. As that amount was paid on April 2, 1970, that can properly form the basis for holding that the value of the wealth of the assessee as on the date of acquisition, i.e., March, 1970, was at least fourteen lakhs. Though there is a prospect of the entire compensation on reference to the competent authority being reduced below that amount, still the fact that Rs. 14,05,536 has been paid cannot be ignored. That is certainly the wealth in the hands of the assessee. Although a dispute is raised as to the right of the assessee to receive compensation, the fact that he is in possession of the wealth cannot be ignored. That position is well settled. However, merely because there i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... , the time spent and the expenditure likely to be incurred, are all factors which would weigh with any person if the right to receive compensation were to be put in the market for sale on the date of death. Hence, those factors are also relevant even for the purpose of determining the value of the wealth of the assessee for the purpose of assessing the wealth-tax. The Appellate Tribunal was, therefore, right in assessing the value of the wealth of the assessee at fourteen lakhs odd which was paid to him on April 2, 1970. As there is a prospect of the said amount being reduced and there is no prospect of the amount being paid in the near future in the circumstances, no further addition could be made to that amount. For the year 1971-72, when ..... X X X X Extracts X X X X X X X X Extracts X X X X
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