COMMISSIONER OF INCOME TAX Vs. PADMAVATHY AMMAL R

JUDGEMENT

(1.) IN pursuance of the order passed by this court, dated March 3, 1981, in T.C.P. Nos. 349 and 350 of 1980, the Tribunal referred the following common question of law relating to the assessment years 1970-71 and 1971-72, for the opinion of this court under section 27(3) of the Wealth-tax Act, 1957 :

(2.) FOR the assessment years 1970-71 and 1971-72, the relevant valuation dates are March 31, 1970, and March 31, 1971, respectively. The assessee possessed vast tracts of agricultural lands of about 1,918.98 1/2 acres, out of which 766.11 1/2 acres were sold before the valuation dates, leaving 1,152.87 acres on the respective valuation dates. While filing the returns of wealth for the assessment years under consideration, the assessee did not place any value upon these agricultural lands on the ground that the agricultural land was not subject to wealth-tax, relying upon the decision of the Punjab and Haryana High Court. This decision of the Punjab and Haryana High Court was later on reversed by the Supreme Court. The. Wealth-tax Officer, who noticed this pronouncement of law, proceeded to value these lands for the purpose of inclusion in wealth-tax assessment. According to the guidelines given for valuation, he estimated the value of the land at Rs. 24.57 lakhs. The basis was however not disclosed in the assessment order. It was represented to him that the guidelines valuation should not be accepted for two reasons. One was that the guidelines valuation did not take into account the amount payable to the tenants, if the lands were in the occupation of tenants. Secondly, since the lands were likely to be taken over by the Government as surplus lands under the Land Ceiling Act, there were restrictions imposed upon their transferability and in view of that, the market value was greatly depressed. The Wealth-tax Officer did not agree with the latter contention, but agreeing with the first contention and making a provision for payment to the tenants, valued these lands at Rs. 18 lakhs.

(3.) WE have considered the rival submissions. The fact remains that in the wealth-tax assessment of the assessee, for the assessment years 1970-71 and 1971-72, the respective valuation dates are March 31, 1970, and March 31, 1971. The point for consideration is to determine the value of the lands which were taken over by the Government amounting to 993.71 acres. The WEalth-tax Officer considering the fact that a portion of the compensation is payable to tenants in the occupation of the lands, determined the value of the land at Rs. 18 lakhs. The Appellate Assistant Commissioner taking into consideration the value determined by the Government under the Land Ceiling Act and other depressing factors, directed the WEalth-tax Officer to accept the value of the lands as determined by the Government under the Land Ceiling Act, which comes to Rs. 4,60,782. Some lands were sold in subsequent years and the value was worked out to Rs. 45,280. On appeal, the Tribunal accepted the view taken by the Appellate Assistant Commissioner that when the land was acquired by the Government and compensation was paid in respect thereof, that should be accepted as the value of the land in question. In the Land Ceiling Act also the valuation date roughly comes to the valuation dates as in the wealth-tax assessment. When the land value of the lands was determined by the Government, the Government is hearing the claimants, the Taram and the character of the land, the value of the land in the nearby vicinity and other advantages and disadvantages, with regard to the location of the land, etc. Therefore, it cannot be said that the value determined under the Land Ceiling Act would be something different from the value, which has got to be determined under the guidelines value as per the WEalth-tax Rules and the WEalth-tax Act. A similar question came up for consideration before this court in the case of CWT v. K. S. Ranganatha Mudaliar [1984] 150 ITR 619, wherein this court held that the valuation on the basis of compensation receivable under the Tamil Nadu Land Reforms (Fixation of Ceiling on Land) Act, 1961, was justified. Therefore, even though the Appellate Assistant Commissioner had not elaborately stated the reasons for accepting the compensation awarded under the Land Ceiling Act, the Tribunal, which is the highest fact-finding authority, in its order, has given ample reasons for accepting the value in accordance with the compensation awarded under the Land Ceiling Act. Therefore, we see that there is no infirmity in the order passed by the Tribunal in accepting the compensation awarded under the Land Ceiling Act as the value of the land as on the relevant valuation dates. In that view of the matter, we answer the question referred to us in the affirmative and against the Department. No costs.