D KAMALA BAI Vs. WEALTH TAX OFFICER
INCOME TAX APPELLATE TRIBUNAL
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George Cheriyan, Accountant Member -
(1.) THESE appeals preferred by the assessee relate to the assessment years 1967-68 to 1973-74 inclusive. The point in dispute is confined to the valuation of the right to receive compensation in respect of certain agricultural lands. The three items of property in respect of which the aforesaid issue has arisen are:
(i) 44 acres 11 guntas of land in Survey Nos. 225, 226 and 227 at Cherlapalli village in respect of which notification of acquisition was issued on 17-11-1966 and possession taken by the Government on 13-3-1967.
(ii) 33 acres 7 guntas of land in Survey Nos. 223 and 224 at Cherlapalli village in respect of which the date of notification and the date of taking over possession were the same as in item (i).
(iii) 8 acres 14 guntas of land in Survey No. 198 in which the assessee had only a half share in respect of which the date of notification was the same as in item (i) but possession was assumed on 9-1-1967.
In respect of the aforesaid items the assessee returned different values but in essence claimed large discounts for hazards of litigation, delay in securing compensation, etc., and pleaded for only much lower values being taken than what were finally awarded or even returned. The WTO broadly took the view that finally awarded compensation, interest and solatium thereon should be the true index.
(2.) The assessee appealed to the AAC who stated that the Land Acquisition Officer (LAO) awarded compensation on 21-9-1970 at Rs. 2,000 per acre and the Additional Chief Judge on a petition for enhancement decided the issue on 27-9-1973 awarding Rs. 2 per sq. yd. There was also a mention in the order of the AAC that certain persons filed a suit claiming that they were protected tenants of part of land in Survey Nos. 223 and 224, i.e., item (ii) aforesaid. The assessee, it would appear as ascertained by us, had contended that there were protected tenants only in respect of 2 acres 10 guntas out of the total area of 33 acres 7 guntas and the assessee's claim was upheld by the Additional Chief Judge on 19-4-1975 as referred to by the AAC. However, the tenants who claimed protected tenancy in respect of about 30 acres took the matter up to the High Court but eventually reached a compromise according to which, the protected tenants were to be paid Rs. 1,35,000 out of the compensation which the assessee was to receive. This compromise was arrived at on 13-11-1977.
The assessee stressed before the AAC that considerable risk was involved, that the presence of protected tenants made the litigation more complicated and that in many cases the Hyderabad Benches of the Tribunal had decided that the fair market value of the right to receive compensation must be something between 20 per cent and 50 per cent of the compensation ultimately awarded.
(3.) THE AAC held that having regard to the facts and circumstances of the case and keeping in mind the time-lag, estimates of fair market value were to be made adopting the following criteria:
(i) Compensation for lands in which no litigation of protected tenancy was involved: Compensation awarded by the Land Acquisition Officer plus 50 per cent of the enhancement in compensation by the Additional Judge of City Civil Court.
(ii) Compensation for lands in which litigation of protected tenancy is involved. It appears that not all the property is involved but only certain percentage of the total area of the land and in Survey Nos. 223 and 224. THE WTO should ascertain this first. He should estimate the fair market value of the appellant's right to receive compensation as follows:
20 per cent of the compensation including the compensation awarded by the LAO for that part of the land which was a subject-matter of litigation between the appellant and the protected tenants. THE remainder should be evaluated as in (i).;
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