COMMISSIONER OF WEALTH TAX Vs. MANJIT KAUR

JUDGEMENT

(1.) Following question of law has been referred for opinion of this Court by the Income-tax Appellate Tribunal, Chandigarh Bench (for short, `the Tribunal'), arising out of its order dated 25.3.1998, in W.T.A. Nos. 21 and 22/CHANDI/92, in respect of assessment years 1988-89 and 1989-90:

(2.) In appeal before the Commissioner of Wealth-tax (Appeals), [for short, `the CWT (A)'], the plea of the assessee was accepted and accordingly, the CWT (A) ordered deletion of the addition from the net wealth as made by the Assessing Officer. Aggrieved against the order passed by the CWT(A), the Revenue went in appeal before the Tribunal, which was rejected by the Tribunal with the following observations:

(3.) The C.W.T.(A) and the Tribunal have held the amount of compensation received by the assessee is not includable in the value of assets held by the assessee on the valuation date only on the ground that the said amount of compensation for acquisition of land which, though received by the assessee as additional compensation is in dispute in the appeal filed by the State Government and the amount had been released against security. We are of the view that this is not a correct interpretation of law. Wealth Tax is chargeable under Section 3 of the Wealth Tax Act on the net wealth which is defined under Section 2(m) of the Act as aggregate value of the assets on the valuation date. We find that similar question has been gone into by the Hon'ble Supreme Court of India, inter-alia, in Pandit Lakshmi Kant Jha Vs. Commissioner of Wealth-Tax, Bihar and Orrissa, (1973) 90 ITR 97, W.T.R. No.9 of 1999 [4] *** Mrs.Khorshed Shapoor Chenai Vs. Assistant Controller of Estate Duty, (1980) 122 ITR 21, Commissioner of Wealth Tax Vs.Smt.Anjali Khan, (1991) 187 ITR 345 and Commissioner of Wealth-Tax Vs.U.C.Mehatab,(1998) 231 ITR 501 and was held that the amount of compensation is receivable on the date acquired property vests in the Government and not on the date when it may be finally determined. Even though appropriate deduction in the value may be made on account of litigation hazard. In Mrs. Khorshed Shapoor Chenai's case (supra), it was observed:-