COMMISSIONER OF WEALTH TAX WEST BENGAL II Vs. U C MAHATAB
HIGH COURT OF CALCUTTA
COMMISSIONER OF WEALTH TAX, WEST BENGAL II
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P.B.Mukharjl, Act.C.J. -
(1.) This reference under the Wealth Tax Act raises the following question for answer : "Whether on the facts and in the circumstances of the case, the Tribunal was right in holding that the assessee had no right on the relevant valuation dates to receive any compensation for the acquisition of his estate from the Government of West Bengal".
(2.) Although the question is framed in that way the real issue by refraining the question is :
"Whether in the facts and circumstances of this case, the right to compensation under the West Bengal Estates Acquisition Act, 1953 constitutes an asset within the meaning of the Wealth Tax Act and specially in view of the fact where such compensation under the West Bengal Estates Acquisition Act has neither been determined nor paid." The facts of this case lie within a small compass. The statement of case refers to the assessments during 1957-58, 1958-59 and 1950-60. There are six re- ference applications upon which the statement of case is made raising the combined contention relating to the inclusion within the net wealth of the assessee the value of his right to receive compensation under the West Bengal Estates Acquisition Act, 1953. The admitted fact, as appeared in the statement of case, is that the assessee had extensive zamindary properties which vested in the State of West Bengal under the provisions of the West Bengal Estates Acquisition Act. The Wealth Tax Officer assessed the right to receive compensation at Rupees 32,00,000 for each of the three years under reference. The Appellate Assistant Commissioner, however, reduced the value of the assessee's right to receive compensation to Rs. 3,25,000 for each year. It is said that the Appellate Assistant Commissioner held that there was a debt owed by the Government under the Estates Acquisition Act to the assessee which could be quantified under the provisions of that Act. In other words, the Appellate Assistant Commissioner took the view that the assessee had tn actionable claim against the Government the value of which was includible in the not wealth of the assessee as an asset within the meaning of Section 2 (e) of the Wealth Tax Act. The valuation for Wealth Tax purposes was made on the basis of Agricultural Income Tax paid on these agricultural lands. On behalf of the assessee it was contended that on the relevant date of valuation the assessee had no right to receive any compensation from the Government and, therefore, he had no actionable claim assessable to wealth tax.
2-A. The decision of the Tribunal upholding the contention of the assessee was against the Commissioner of Wealth Tax. The Tribunal's conclusion can be briefly summarised here. In the first instance, it points out that the compensation is only Eayable to the intermediary whose right has been acquired by the Government under the West Bengal Estates Acquisition Act which provides by Section 14 (1) that the Compensation Officer is required to prepare the Compensation Assessment Roll within 8 years from the date of vesting specifying, inter alia, the amount of compensation payable in accordance with the provision of that Act. Therefore, the Tribunal says that when the Compensation Assessment Roll has been prepared and finally published under Section 21 of the Act the Compensation officer is required to make an offer of payment of the compensation to the intermediary. Oil this basis of reasoning the Tribunal says that as the fact is that no Compensation Roll has been prepared by the Compensation officer as yet under Section 14 (1) of the West Bengal Estates Acquisition Act, there is no right in the assessee to any compensation. This is the first and paramount reason of the Tribunal for not including the alleged right of compensation in the net wealth of the assessee. The Tribunal quoted Section 23 (1) (a) of the West Bengal Estates Acquisition Act, where it is provided, inter alia, "as soon as may be after the date of the final publication of a Compensation Assessment Roll under Section 21, the Compensation Officer shall, in the prescribed manner, make an offer of payment of the compensation to the intermediary who is entitled to such compensation in terms of the compensation assessment roll together with interest at the rate of three per centum per annum of such compensation accruing from the date of vesting to the days of the offer of payment."
(3.) The logic of the Tribunal is that the intermediary is not entitled to receive any compensation until the compensation assessment roll has been prepared and finally published under Section 21 of the Act although he may be allowed ad interim payment from time to time against the compensation receivable by him after the final publication of the compensation roll. Therefore, the Tribunal came to the conclusion. (1) that the Wealth Tax Officer was wrong in assuming that the assessee had a right to receive compensation upon the claim preferred by him in Form 3A under Rule 10 (3) of that Act and (2) the Appellate Assistant Commissioner was wrong in holding that the assessee had an actionable claim which had a hypothetical market value, on the valuation date.;
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