Commissioner of Wealth-tax vs T. Girijammal

P.D. Dinakaran, J.—The above tax case appeal is directed against the order of the Income Tax Appellate Tribunal in W.T.A. No.

66(Mds)/2004 dated July 14, 2005.

The Revenue is the appellant. The assessment year involved is 1992-93. The assessee received compensation from the Housing Board,

Tirupathur, TATC for the lands acquired and interest was accruing on such compensation. The State Government filed an appeal challenging the

said compensation and the same is pending. The sub-court awarded interest on the additional compensation from the date of possession taken by

the Government. The assessee filed a return of wealth admitting a net wealth of Rs. 12,95,500. The Wealth-tax Officer arrived at a net wealth of

Rs. 46,51,330 and Rs. 53,022 was charged as wealth-tax. Hence, the assessee preferred an appeal before the Commissioner of Income Tax

(Appeals) and the same was allowed. Therefore, the Revenue preferred an appeal before the Income Tax Appellate Tribunal and the same was

dismissed.

Aggrieved by the same, the Revenue has come forward with this appeal, raising the following substantial questions of law:

Whether, on the facts and in the circumstances of case, the Income Tax Appellate Tribunal is right in law in not considering Section 45(5)(c) and

Section 155(16) of the Income Tax Act, which clearly provided the mode of calculation to be adopted irrespective of the fact whether the appeals

are pending or not?

Whether, on the facts and in the circumstances of the case, the Income Tax Tribunal is right in law in holding that in the acquisition proceedings

relating to the assessee''s land made by the State Government and payment of interest on additional compensation made at different points of time

were not liable to tax due to the fact that appeals were pending?

Whether, on the facts and in the circumstances of the case, the Income Tax Tribunal is right in law in holding that the assessee did not own the

amount of compensation whether received or not on the valuation date for the respective assessment year?

Learned Counsel for the appellant fairly submitted that the above issues are covered by a decision of this Court dated January 21, 2006, made

in T.C. Nos. 573 to 576 of 2005, etc., batch The Commissioner of Wealth Tax Vs. Smt. T. Girija Ammal, .

This Court in T.C. Nos. 573 to 576 of 2005, etc., batch The Commissioner of Wealth Tax Vs. Smt. T. Girija Ammal, held that when the

additional compensation awarded by the civil court had not been accepted by the State Government and it had preferred an appeal objecting to

the enhancement, the said additional compensation received, could not be treated as part of the compensation received for the transfer of the land

until it is finally determined by the High Court or the Supreme Court. If the appeal of the State is allowed the assessee is bound to refund the

amount and hence, the same cannot be assessed before reaching finality. The right to receive the additional amount awarded by the court as part of

the compensation was only an inchoate right during the pendency of the matter before higher judicial forums. In such circumstances, the disputed

compensation has to be assessed only when it is finally determined by the higher courts. The Tribunal had rightly held that the additional

compensation could not be assessed during the year in question and can be assessed only at a time when the final higher court decides the issue.

This court, in respect of question No. 3, held in the decision cited supra, that the wealth-tax assessment had been framed on the basis of the

corresponding Income Tax assessments. Hence, when the income itself is not accruing or arising, the question of levying wealth-tax also does not

arise, as it is only consequential in nature.

In view of the ratio laid down in the decision cited above, we are of the view that the order passed by the Tribunal is in accordance with law and

requires no interference. We find no merit in these appeals, as no questions of law arise for consideration of this Court. Hence, the above appeal is

dismissed. No costs.