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Bhim Singh Lather v. Commissioner of Wealth Tax, Panchkula - WTA-4-2005 [2006] RD-P&H 1655 (10 March 2006)

W.T.A.No.4 of 2005 [1]


C.M.No.2707 of 2005

W.T.A.No.4 of 2005

Date of decision: 7.3.2006

Bhim Singh Lather



Mr.P.C.Jain, Advocate


Commissioner of Wealth Tax, Panchkula



Mr.Rajesh Bindal, Advocate

Hon'ble Mr.Justice D.K.Jain, Chief Justice Hon'ble Mr. Justice Surya Kant

1.Whether Reporters of local papers may be allowed to see the judgment ?

2. To be referred to the Reporters or not ?

3. Whether the judgment should be reported in the Digest? D.K.Jain, C.J. (Oral)

C.M.No.2707 of 2005

For the reasons stated in the application, the delay in filing the appeal is condoned.

The application stands disposed of.

W.T.A.No.4 of 2005 [2]

W.T.A.No.4 of 2005

This appeal, by the assessee, under Section 27A of theWealth Tax Act, 1957 (for short, `the Act') is directed against order, dated 21.5.2004, passed by the Income-tax Appellate Tribunal, Delhi Bench (for short, `the Tribunal') in W.T.A.No.115 and other connected appeals. The present appeal pertains to the assessment year 1989-90. According to the assessee, the order of the Tribunal involves the following substantial questions of law: "(1) Whether the Tribunal is justified in hearing the appeal and adjudicating the issue legally and on merits and also rejecting the miscellaneous application without having granted the opportunity of representation going to prejudice the rights of the assessee? (2)Whether on the true and correct interpretation of the decision of the Hon'ble Apex Court the Tribunal is justified in ignoring the applicable judgment of the Apex Court and adjudicating the issue on wrong application of mind?

(3)Whether the Tribunal is justified in adopting two contradictory views on the similar issue and also ignoring the judgment of the Hon'ble Jurisdictional High Court ?

(4)Whether the Tribunal is justified in setting aside the matter instead of adjudicating to the Assessing Officer whereby the said set aside was never pleaded and or demanded by any of the litigants before the authorities W.T.A.No.4 of 2005 [3]


(5) Whether on the true and correct interpretation of the various case laws, the Tribunal is justified in charging the inchoate rights of the assessee as includible in the net chargeable wealth? 2- Briefly stated, the background facts are as follows: Some pieces of land, owned by the assessee, an individual, situated in the municipal limits of Karnal were acquired by the government vide award dated 16.2.1989 and compensation of Rs.3,90,327/- was paid to the assessee.

Assessee's application for enhancement of compensation was allowed by the Additional District Judge vide order dated 6.5.1993 and the land rate was fixed @ Rs.76/- per square yard. In furtherance of the said order, the assessee received additional compensation on different dates. The assessee as well as the government preferred further appeals to the High Court against the decision of the Additional District Judge.

4- During the course of assessment proceedings, the Assessing Officer took the view that since the assessee had already received compensation at the rate of Rs.76/- per square yard, there was no reason to evaluate the right to receive compensation at the rate less than Rs.76/- per square yard. Accordingly, he evaluated the value of the said right at the said rate and added the same to the net wealth of the assessee. The Assessing Officer, thus, rejected the plea of the assessee that since the State Government was contesting the compensation W.T.A.No.4 of 2005 [4]

determined by the District Judge before the High Court, the right to receive enhanced compensation was only an inchoate right, which was incapable of being evaluated. The assessee wanted the right to receive compensation to be evaluated at the rate of Rs.53/- per square yard, admitted by the State.

5- Being aggrieved, the assessee preferred appeal to the Commissioner of Wealth Tax (Appeals). The Commissioner accepted the plea of the assessee and accordingly, directed the Assessing Officer to evaluate the right to receive compensation at the rate of Rs.53/- per square yard.

6- Not being satisfied with the view taken by the Commissioner, the Revenue took the matter in further appeal to the Tribunal. By the impugned order, the Tribunal has allowed revenue's appeal. Relying on the decision of the Apex Court in Commissioner of Wealth-tax v. Smt.Anjamli Khan, (1991) 187 ITR 345, the Tribunal has come to the conclusion that the right to receive compensation does not cease to be an "asset" includible in the net wealth of an assessee, merely because the value thereof has not been finally determined on the valuation date.

Nevertheless, referring to yet another decision of the Supreme Court in Commissioner of Wealth tax v. U.C.Mehatab, (1998) 231 ITR 501, the Tribunal remanded the case back to the Assessing Officer for determining afresh the value of right to receive compensation, observing thus: "After having held no include the value of right as an asset, the next question would be determination of its value. It is also a settled position W.T.A.No.4 of 2005 [5]

that right to receive compensation can only be the present value, i.e., value as on the valuation of the amount, that may be determined and paid as compensation in future. It cannot be equal to the amount of compensation payable under the Acquisition Act. Reference to this may be made to the Apex Court decision in CWT v. U.C.Mehtab 231 ITR 501(SC).

Respectfully, following this decision and since this value @ Rs.76/- per sq.

yard having not been received as on the relevant valuation date, the AO, therefore, shall determine this value afresh on a consideration of all relevant aspects that may be put forward before him including factor of risk and hazard of litigation. A reasonable opportunity of being heard shall be given to the assessee. "

Hence, the present appeal.

7- We have heard learned counsel for the parties. Mr.Jain, learned counsel appearing for the assessee, has urged that the Tribunal was not justified in holding that even that part of the compensation, which was being disputed by the State, was capable of being evaluated and therefore, includible in the net wealth of the assessee as such. Thus, learned counsel asserts that the order of the Tribunal involves a substantial question of law.

8- Having carefully perused the direction by the Tribunal, we are of the view that the appeal is utterly misconceived. It is manifestly clear from the afore-extracted portion of the order of the Tribunal that insofar as the evaluation of W.T.A.No.4 of 2005 [6]

that portion of the rate of enhanced compensation, which is in dispute, is concerned, the Tribunal has clearly directed its evaluation by keeping in view all the relevant aspects, including the element of litigation etc. We are of the opinion that the direction is based on settled legal principles and therefore, no fault can be found with the impugned direction.

9- The order of the Tribunal does not involve any question of law, much less a substantial question of law. Accordingly, we decline to entertain the appeal. Dismissed.

( D.K. Jain )

Chief Justice

( Surya Kant )





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