COMMISSIONER OF INCOME TAX Vs. JAMNABAI TOPANDAS

JUDGEMENT

(1.) THE following question has been referred by the Tribunal to this Court for its opinion :

(2.) THE short facts leading to the present reference may be stated as under :

(3.) SIMILAR reference in assessee's own case being WT Ref. Nos. 19 of 1976 and 5 of 1977 were before this Court. SIMILAR question was referred. In the said case the decision of the Supreme Court in Mrs. Khorshed Shapoor Chenai vs. Asst. CED (1980) 14 CTR (SC) 356 : (1980) 122 ITR 21 (SC) was referred to. In the said Supreme Court case the principle enunciated is that in land acquisition proceedings, the claimant has only one right ot receive compensation for the land at its market value on the date of s. 4 notification, which right is quantified by the Collector under s. 11 and by the Civil Judge under s. 26 of the said Act. The award of the Collector is merely an offer which on acceptance, will extinguish the right to compensation. The non-acceptance of the offer, or the acceptance of the offer under protest with a prayer of reference, will keep the right of compensation alive which a claimant can prosecute in the Civil Court. The right which a claimant pursues in Civil Court is not merely a right to litigate the correctness of the award. The correctness of the award is a collateral question in course of the reference, since the right ot compensation is not fulfilled. The evaluation of this right made by the Civil Court in reference would not be the evaluation of the asset for the purposes of either ED Act or the WT Act on the specified date. The estimated value of the right ot receive compensation, which is a property, is equally to collector's award but cannever by equal to the tall claim made by the claimant in the reference, nor equal to the claim actually warded by the Civil Court, since the hazard of litigation is a detracting factor in assessing the reasonable and proper market value of the property on a specified date, namely the date of death under the ED Act. The assessing authority is under obligation to estimate the value bearing in mind the particular nature of the property, the marketability and the surrounding circumstances including the hazard of litigation a the relevant date.