MUKAT RAJYA LAXMI Vs. COMMISSIONER OF WEALTH TAX

JUDGEMENT

(1.) THE Tribunal had referred the following question of law arising out of its order dt. 17th Nov., 1983 in respect of the asst. yrs. 1971-72 to 1979-80 under s. 27(1) of the WT Act, 1957 (`the Act');

(2.) THE brief facts of the case are that late Shri Raghunath Singh was one of the rulers of Jaisalmer before merger of the said State in Rajasthan. He was given land measuring 3120 sq. Yards in Diplomatic Enclave, New Delhi under an agreement to lease which was registered on 10th May 1963. This plot of land was given in lieu of a house property known as `Jaisalmer House" at Mansingh Road, New Delhi, which was acquired by the Government of India. In accordance with the agreement so entered, the assessee taken over the possession of the plot of land and constructed a building. Necessary approval as contemplated under the original agreement was also taken. THE assessee had the right to use this bungalow for residential purposes and get the lease- deed signed. THE lease-deed was not executed and the said building was not used for the residential purposes for which the land was allotted. THE building was let out to Nigerian Embassy at a rent of Rs. 8,000 per month. Since the building was to be used for the assessee's own residential purposes and had been let out, the lessor; namely, the Government of India considered this manner and condoned this breach subject to payment of certain amounts.

(3.) THE right to receive compensation was considered to be an asset by the Apex Court in the case of Pandit Laxmi Kant Jha vs. CWT 1973 CTR (SC) 260 : (1973) 90 ITR 97. In this case even the amount of compensation payable was not determined by the Compensation Officer by the valuation date. It was held that the right to receive compensation from the State became vested, the moment the assessee is divested of his estate and the same got vested in the Government. THE matter of determination of compensation was considered to be a matter of calculation. THE right to receive compensation from the State was held a valuable right. THE land which was allotted to the assessee was in lieu of the property acquired and it was a valuable right to the assessee by which the said plot of land was allotted. THE lessor has not claimed any right over the land or the building and impliedly it could have been considered a waiver on its part for exercising such a right on payment of certain charges. THE lessor has already amended the agreement by permitting use of the said property for rental purposes as well and the only thing required to be done was payment of the amount fixed by the lessor. Non-payment of the said amount would not result in abrogation of the right of the assessee. THE lessor has a right to enforce the recovery of said amount and simply because for one reason or the other the said amount has not been paid, it cannot be considered that the assessee has no right in the property or, and that the said property does not constitute an asset.