(a) Wealth tax---

----Reference---Balance standing to credit in compulsory deposit account on valuation date---Whether asset for purposes of wealth tax---Question of law-- Indian Wealth Tax Act, 1957, S.27.

The question whether the balance standing to the assessee's credit in the compulsory deposit account on the relevant valuation date was an asset for purposes of wealth-tax was a question of law.

(b) Wealth tax---

----Reference---Land---Compulsory acquisition of land---Compensation awarded initially ---Assessee claiming enhanced compensation---Compensation awarded initially can be received---Tribunal justified in including compensation awarded initially in net wealth---No question of law arose---Indian Wealth Tax Act, 1957, S.27.

Where land is compulsorily acquired, when the collector makes an award, the amount which is offered can under no circumstances, be reduced With the acquisition proceedings having become final and the possession of the land having been taken from the petitioner prior to the valuation date, the sum representing compensation paid initially was rightly included in the net wealth of the assessee even if the amount was in dispute on account of the petitioner claiming enhanced compensation. No question of law arose for reference.

[The Supreme Court has dismissed a special leave petition filed by the assessee against this judgment].

Sita Ram Singhania v. CWT (1990) 183 ITR 147 (Delhi) and Khorshed Shapoor Chenai (Mrs.) v. Asst. CED (1980) 122 ITR 21(SC) ref.

R. Santhanam with Sanat Kumar for the Assessee.

Rajendra With R.N. Verma for the Commissioner.

JUDGMENT

The petitioner seeks reference of the following two questions to this Court:

"(1)Whether, on the facts and in the circumstances of the case, the Hon'ble Income Tax Appellate Tribunal, Delhi Bench `E', was justified in holding that the sum of Rs.23,309 representing the amount of compensation initially awarded and which remained in dispute till August 23, 1982, and which was received on April 5, 1984, was includible in the net wealth of the assessee for the assessment year 1977-78 for which the relevant valuation date is March 31.1977?

(2)Whether, on the facts and in the circumstances of the case, the Hon'ble Income Tax Appellate Tribunal, Delhi Bench `E', was justified in rejecting the assessee's claim for exclusion of Rs.7,890 being the balance standing to her credit in the compulsory deposit account on the relevant valuation date by virtue of its being in the nature of a right to receive annuity and hence not being liable to be regarded as an asset?"

As regards question No.2, a similar question was called for by us in Sita Ram Singhania v. CWT (1990) 183.ITR 147 (Delhi). This question has, therefore, to be referred.

As regards question No.l we find from the facts that, after the land was acquired under the provisions of the Land Acquisition Act, a sum of Rs.23,309 was offered as compensation by the Collector. A reference under section 18 of the Land Acquisition Act was filed whereby the petitioner sought enhanced compensation. This dispute with regard to enhancement of compensation was decided on August 23, 1982. The contention of the petitioner is that, on the relevant valuation date, i.e., March 31, 1977, pertaining to the assessment year 1977-78, with which we are concerned in this case, this amount of Rs.23,309 could not be added to the income as the amount was in dispute. He further submits that, in the alternative, only a discounted value could be taken into account.

We are unable to agree with this contention. When the Collector makes an award, the amount which is offered can, under no circumstance, be reduced. With the acquisition proceedings having become final and the possession of the land having been taken from the petitioner prior to the valuation date, the question of Rs.23,309 not being paid to the petitioner does not arise. The petitioner may choose not to receive this money but his right to receive this money became final with the possession of the land being taken. The question of the principle of discounted value being applied would not arise in such a case. The petitioner chose not to receive this amount because a reference had been filed under section 18 of the Act for enhancement of the compensation. There was nothing in law which prevented the petitioner from receiving this sum of Rs.23,309 under protest and without prejudice to his claim under section 18 of the Act. In our opinion, the sum of Rs.23,309 was clearly an asset of the assessee as on the valuation date. In fact, before the assessing authority, the assessee consented to this amount being added.

It is contended by learned counsel for the petitioner that no distinction can be drawn between the original compensation and the enhanced compensation in view of the Supreme Court decision in Khorshed Shapoor Chenai (Mrs.) v. Asst. CED (1980) 122 ITR 21. In our opinion, the said judgment of the Supreme Court has no application to this case. There, the Court was concerned with the right of a person to receive enhanced compensation at the time of his death. We are here concerned with a different question, viz., whether the amount of Rs.23,309 was due to the petitioner or was an asset of the petitioner as on the valuation date. The answer to this question can only be one, that is in the affirmative. Learned counsel for the petitioner is unable to bring to our notice any provision of law which deprives the petitioner of the amount of Rs.23,309 after the acquisition has become final.

The answer to question No.l is, therefore, self-evident and, therefore, the question need not be: referred.

For the aforesaid reasons, this application is partly allowed and the Tribunal is directed to state the case and refer question No.2 to this Court.

There will be no order as to costs.

M.BA./2310/TApplication party allowed.