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PETITIONER: LAKSHMI KANT JHA

       Vs.

RESPONDENT: COMMISSIONER OF WEALTH TAX BIHAR AND ORISSA

DATE OF JUDGMENT16/04/1973

BENCH: KHANNA, HANS RAJ BENCH: KHANNA, HANS RAJ HEGDE, K.S.

CITATION:  1973 AIR 2258            1973 SCR  (3) 973  1974 SCC  (3) 126  CITATOR INFO :  RF         1977 SC1657  (8)  C          1980 SC 775  (10)  D          1984 SC 940  (15)  F          1991 SC2023  (6,7)

ACT: Wealth  Tax  Act, 1957, s. 5(1)XIII and  5(1)XV--Is  jewelry for  personal use exempted--Whether brokerage charges to  be excluded  and  right  to compensation included  in  the  net wealth of the assessee.

HEADNOTE: The  assessee, former Maharaja of Darbhanga filed  a  return for the assessment year 1957-58 declaring his net wealth  of more  than two and half crores.  A revised return was  filed subsequently  showing  a  lesser  amount.   The   wealth-tax officer determined the net wealth of the assessee to be more than four and half crores. The  assessee held shares and stocks in  various  companies. The  assessee  gave correct valuation of  those  shares  but claimed a deduction of more than 2 lakhs by way of brokerage which he would have to pay it those shares were sold in  the open  market.  Further, the assessee claimed deduction  from the net wealth of the value of jewelry intended for personal use.   Thirdly, the assessee claimed deduction of more  than 36  lakhs, payable to him as compensation by the  Government for  acquiring his Zamindari estate, on the ground  that  it was not known as to when and in what manner the amount would be paid. The  wealth-tax  officer rejected all his claims  and  after estimating  the value of compensation to be 75 per  cent  of its face value, Rs. 27,65,564 was added to the total  wealth of the assessee. On appeal, the Appellate Assistant Commissioner affirmed the decision  of  the  wealth-tax officer.   The  Tribunal  also rejected the claims of the assessee so far as the  brokerage commission and the jewelry was concerned.  It ’further  held that  the valuation of the bonds should be determined to  be 65  per cent of the face value.  On a reference to the  High Court,  all  three  questions  were  answered  against   the assessee.   On  appeal before this Court.  all  those  three points were raised.

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Partly allowing the appeal HELD  :  (i)  As  regards  the  question  relating  to   the jewelry,  it  was  decided in Commissioner  of  Wealth  Tax, Gujarat v. Arundhati Balkrishna, [1970] 77, I.T.R. 505, that section  5(1)(XV)  dealt  with jewelry  in  general  whether intended  for  personal use of the assessee  or  not.  while jewelry  intended  for  personal use of  the  assessee  came within  the scope of section 6(1)(viii) of the Act.  It  was accordingly  held that the value of jewelry of the  assessee intended  for  personal  use of  the  assessee  would  stand excluded under section 5(1) (viii) of the Act in computation of the net wealth of the assessee.  In the present case,  in absence  of any plea that the jewelry was not  intended  for the   assessee’s  personal  use,  and  in  absence  of   any retrospective operation of the Finance Act of 1971 excluding jewelry  from the purview of cl.  VIII of Sec. 5(1)  of  the Act, the value of the jewelry for his personal use will  not be included in the net wealth of the assessee. [977D] (ii)Regarding brokerage commission section 7(1) of the  Act provides  that subject to any rule made in this behalf,  the value of any asset shall be 974 estimated  to  be  the price which in  the  opinion  of  the wealth-tax  officer would fetch if sold in the open  market. There  is  nothing in the language of Sec. 7(1) of  the  Act which  permits any deduction on account of the  expenses  of sale  which  may  be  borne  by  the  assessee.   The  value according to Sec.’ 7(1) has to be the price which the  asset would  fetch if sold in the open market.  Therefore, so  far as the construction of Sec. 7(i) of the Act is concerned, in view  of its plain language, there is no scope of  excluding the  expenses of sale of the asset from the price which  the asset would fetch if sold in the open market. [980C, D] Duke  of  Buccleuch v. Indian Revenue  Commissioner,  [1967] A.C. 506, referred to. (iii)As   regards   inclusion   of   the   compensation receivable by the assesseefrom   the  Government,   sec. 32(2) of the Bihar Land Reforms Act, 1950provides   that the   amount   of  compensation  payable  in  terms   of   a Compensation  Assessment-roll  shall be paid in cash  or  in bonds or partly in cash and Partly in bonds.  Therefore,  as soon  as the estate vests in the State, the proprietor or  a tenure-bolder  has  the right to get compensation  and  this right  to  get  compensation  comes  under  the   definition "assets"  as  given in section 2(e) of the Wealth  Tax  Act. [982D-E, 983 D] Maharajkumar  Kamal  Singh v. Commissioner  of  Wealth  Tax, [1967] 65 I.T.R. 460, referred to. (iv)As  would  appear from the order of the  Tribunal,  the value of ,compensation payable under the Bihar Land  Reforms Act  has been estimated for the purpose of wealth-tax to  be 65 per cent of the amount of compensation determined.  There is no cogent ground to interfere in this regard. [986A] Commissioner  of  Wealth  Tax v. U. C.  Mahatab,  [1970]  78 I.T.R. 214, discussed and distinguished.

JUDGMENT: CIVIL APPELLATE JURISDICTION : Civil Appeal No. 296 of 1970. Appeal  by  certificate from the judgment  and  order  dated February 28, 1968 of the Patna High Court in Tax Case No.  8 of 1966. R.   J. Kolah and I. N. Shroff, for the appellant.

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F.S.  Nariman,  Addl.   Solicitor-General of  India,  T.  A. Ramachandran,  S.  P.  Nayar and R.  N.  Sachthey,  for  the respondents.  The Judgment of the Court was delivered by KHANNA,  J.  This appeal on certificate is directed  against the judgment of Patna High Court whereby that court answered the  following three questions referred to it under  section 27  of  the  Wealth  Tax Act, 1957  (Act  No.  27  of  1957) (hereinafter referred to as the Act) against the assessee :               "(i ) Whether in commuting the market value of               the  shares  the assessee is entitled  to  the               deduction  of a sum of Rs. 2,30,546 by way  of               brokerage commission;                975               (2)Whether   on  a  true  construction   of               section  5 (1) (viii) and 5 (1 ) (xv)  of  the               Wealth  Tax Act, the assessee is  entitled  to               the   exclusion  of  the  value   of   jewelry               amounting  to  Rs.  27,27,330  from  the  com-               putation of his total wealth?-                (3)  Whether  any part of the amount  of  Rs.               36,87,419 fixed as compensation payable to the               assessee  under the Bihar Land Reforms Act  is               liable  for inclusion in the total  wealth  of               the assessee?" The  assesse was former Maharajadhiraja of  Darbhanga.   The matter relates to the assessment year 1957-58, the  relevant valuation  date for which was March 31, 1957.  The  assessee filed  a return on April 22, 1958 declaring a net wealth  of Rs.  2,77,46,489.  A revised return was  filed  subsequently showing the total wealth to be Rs. 2,69,58,130.  The  Wealth Tax Officer determined the net wealth of the assessee to  be Rs. 4,57,85,996. The  assessee  held  shares and stocks  in  various  limited companies.   In  the return filed by him the  assessee  gave correct valuation of those shares and stocks as given in the stock  exchange quotations and the quotations  furnished  by well-known  brokers, but he claimed a deduction of a sum  of Rs. 2,30,546 by way of brokerage. It was contended on behalf of the assessee that in  effecting  the sales of the  shares and stocks, brokerage would have   to  be paid.  The  Wealth Tax  Officer  disallowed the claim in this  respect  on  the ground  that  there  was no  provision  for  deducting   the brokerage commission. In  Part  IV  of  the  return  filed  by  the  assessee,  he mentioned the value of jewelry intended for personal use  to be  Rs. 27,27,330. It was claimed that as the  said  jewelry was  intended for personal use, it should not be taken  into account for computing the total wealth of the assessee.  The assessee sought to bring his case under section 5 (1) (viii) of the Act. The Wealth Tax Officer rejected  this  claim  of the assessee on the ground that the aforesaid clause did not cover jewelry. The assessee had held zamindari estate which was acquired by the  Government  under  the  Bihar  Land  Reforms  Act.  The assessee  was  to receive a sum of Rs.  36,87,419  from  the Government of Bihar as compensation in that connection.  The assessee  claimed that the compensation payable to him could not be included in his total wealth because it was not known as to when and in what manner the amount would be paid.  The Wealth   Tax  Officer  held  that  the  right   to   receive compensation  represented a valuable asset which had  to  be included  in the total wealth of the assessee. As the  whole of the compensation had not yet been paid up to the date  of the valuation, the Wealth Tax Officer esti- 976

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mated the value of the compensation to be 75 per cent of its face   value.   Rs. 27,65,564 were accordingly  included  on that account in the, total wealth of the assessee. On appeal the Appellate Assistant Commissioner affirmed  the decision  of the Wealth Tax Officer on the  three  questions mentioned above.  The Appellate Assistant Commissioner  also held  that  the items of jewelry could  be  considered  only under  section 5(1)(xv) of the Act and not under  any  other provision.   On further appeal to the Income  Tax  Appellate Tribunal,  the Tribunal rejected the claim of  the  assessee for deduction on account of brokerage commission.  So far as the  jewelry  was  concerned, the Tribunal  dealt  with  the submission  made on behalf of the assessee that clause  (xv) of  section 5(1) of the Act had been deleted by the  Finance Act of 1963 and observed that as long as that clause was  in the  statute  book,  that  clause  governed  the  exemptions granted  by section 5 in preference to clause  (viii).   The Tribunal consequently rejected the claim of the assessee  in respect of the jewelry.  As regards the compensation payable under the Bihar Land Reforms Act to the assessee, contention was  raised on behalf of the assessee that the market  value of the compensation bonds was about 50 per cent of its  face value.   The Tribunal observed in this connection  that  the value  was generally estimated at 65 per cent of the  amount of compensation determined by the Compensation Officer.  lit was accordingly held that the valuation of the bonds  should be  determined  to be 65 per cent of the  face  value.   The questions  reproduced above were thereafter referred to  the High Court at the instance of the assessee. The  High  Court  while dealing  with  the  first  question, observed  that in estimating the value of an  asset  regards must be had to the value it would fetch.  The word  "fetch", in the opinion of the High Court, must mean the quoted price only and brokerage and other inevitable expenses would  have to  be  ignored.   On  question  No.  (2),  the  High  Court expressed the opinion that the jewelry was outside the scope of  clause  (viii) of section 5(1) of the Act and  could  be dealt with only under clause (xv).  As regards question  No. (3), the High Court relied upon its earlier decision in  the case  of Maharajkumar Kamal Singh v. Commissioner of  Wealth Tax.(1)  It was observed that merely because the  amount  of compensation  payable to the assessee had not yet been  paid and  there was likely to be much delay in paying  the  same, the  said amount could not be deducted from the  assets  for the  purpose  of  the  Act.   Questions  (1)  and  (2)  were accordingly answered in the negative while question No.  (3) was answered in the affirmative. (1) [1967] 65 I. T. R 460. 977 In appeal before us Mr. Kolah on behalf of the appellant has assailed  the correctness of the answers given by  the  High Court  on  all the three questions.  As  against  that,  the learned  Additional Solicitor General has canvassed for  the correctness of the judgment of the High Court so far as  the answers to questions (1) and (3) are concerned.  As  regards question No. (2), the Additional Solicitor General has  made certain  submissions  to  which  reference  would  be   made hereafter.   We, may at the outset deal with question No. (2)  relating to  the jewelry.  As mentioned earlier, the High Court  took the  view that as jewelry was dealt with specifically  under clause  (xv) of section 5 (1) of the Act, the jewelry  would be outside the scope of clause (viii) altogether.  This view of  the  High  Court  cannot be  sustained  because  of  the decision of this Court in the case of Commissioner of Wealth

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Tax, Gujarat v. Arundhati Balkrishna.(1) It was observed  in that  case by this Court that section 5 (1) (xv) dealt  with jewelry in general whether intended for personal use of  the assessee or not, while jewelry intended for personal use  of the  assessee came within the scope of section 5 (1)  (viii) of  the  Act.   It was accordingly held that  the  value  of jewelry  of  the assessee intended for personal use  of  the assessee would stand excluded under section 5 (1) (viii)  of the  Act in the computation of the net wealth.  The  learned Additional  Solicitor General has frankly conceded  that  in view  of  the aforesaid decision of this  Court,  he  cannot support the view taken by the High Court in the respect.  It has,  however, been submitted by him that we  should  remand the  case  with a view to ascertain as to how  much  of  the jewelry in question was intended for the personal use of the assessee.    We  find  it  difficult  to  accede   to   this contention.   The matter is rather old as it relates to  the assessment  year 1957-58.  The case of the  assessee  before the Wealth Tax Officer was that the entire jewelry worth Rs. 27,27,330  was intended for his personal use and should  not be  included  in the total wealth.  The Wealth  Tax  Officer disallowed the claim of the assessee in this respect on  the ground that the items of jewelry were covered by clause (xv) and  not by clause (viii) of section 5 (1) of the Act.   The claim  of  the  assessee that the jewelry  in  question  was intended  for  the  personal use of  the  assessee  was  not rejected.   No  plea was also raised in  appeal  before  the Appellate  Assistant Commissioner or the Tribunal  that  the jewelry  was  not  intended  for the  personal  use  of  the assessee.  It, therefore, cannot be said on the record  that the  claim of the assessee that the jewelry in question  was intended for his personal use has been controverted.  In the circumstances,  we  must proceed on the assumption  for  the purpose of the assessment during the relevant year that  the jewelry was intended for the personal use of the assessee. (1)  [1970] 77 I. T. R. 505. 978 It  may  be  mentioned that jewelry  has  been  excluded  by section  32  of the Finance (No. 2)Act of 1971  (Act  32  of 1971)  from the purview of clause (viii) of section 5(1)  of the Act with effect from April 1, 1963.  This amendment made in  clause  (viii) would not make  any  material  difference because  the said amendment is to operate with  effect  from April 1, 1963, while we are dealing with the assessment year 1957-58.   As  such, the said amendment ,can  obviously  not apply to the assessment in question. Question No. (1), as would appear from the above, relates to the  claim  of  the assessee for  deduction  on  account  of brokerage  commission  from the value of shares  and  stocks held  by him.  The stand which has been taken on  behalf  of the  assessee  is that as and when he sells the  shares  and stocks   in  question,  he  would  have  to  pay   brokerage commission.   As  such, it is urged that  in  computing  the value  of this asset, the price which it would fetch in  the market should be reduced by the brokerage which would  ’have to  be paid on account of the transaction of the  sale.   We find  it  difficult to accede to this  contention.   Section 7(1) of the Act ,reads as under               "Subject to any rules made in this behalf, the               value  of any asset, other than cash, for  the               purposes of this Act, shall be estimated to be               the price which in the ,opinion of the Wealth-               tax Officer it would fetch if sold in the open               market on the valuation date." Bare  reading of the section makes it plain that subject  to

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any  rules which may be made, in this behalf, the  value  of the  assets, other than cash, has to be the price which  the assets,  in  the ,opinion of the Wealth-tax  Officer,  would fetch in the open market  on the valuation date.  It  would, therefore,   follow  that  ,in  the  absence  of  any   rule prescribing  a different criterion, the ,value of an  asset, other  than cash, should be taken to be the price \which  it would  fetch  if sold in the open market  on  the  valuation ,date.   No  rules  prescribing  a  different  criterion  in respect  of the value of quoted stocks and shares have  been brought  to our notice.  ’Rule 1-C of the  Wealth-tax  Rules relates  to the market value of unquoted preference  shares, while rule 1-D of the said rules relates to market value  of unquoted  equity shares of companies other  than  investment companies  and managing agency companies.  The value of  the stocks  and shares in question, in the Circumstances,  would have  to;  be estimated to be the price  which  they  ’would fetch  if  sold in the open market on the  valuation  ,date. The  authorities  concerned under the Act for  this  purpose :accepted   the  valuation  as  given  in   stock   exchange quotations  and  the  quotations  furnished  by   well-known brokers.   No  objection  can  be  taken  to  this  mode  of valuation.  Indeed, this was the mode 979 which had been adopted by the assessee himself in the return filed by him. There is nothing in the language of section 7(1) of the  Act which  permits any deduction on account of the  expenses  of sale  which may be borne by the assessee if he were to  sell the  asset  in  question  in the  open  market.   The  value according  to  section 7(1) has to be the  price  which  the asset  would  fetch it sold in the open market.  In  a  good many cases, the amount which the vendor would receive  would be  less  than the price fetched by the asset.   The  vendor may,  for example, have to pay for the brokerage  commission or  may  have to incur other expenses for  effectuating  the sale.  It is not, however, the amount which the vendor would receive  after  deduction of those expenses  but  the  price which the asset would fetch when sold in the open market  as would  constitute the value of the asset for the purpose  of section  7(1)  of  the Act.  To, accede  to  the  contention advanced  1n  behalf of the appellant would  be  reading  in section 7(1) the words "to the assessee’ after the words "it would  fetch",  although the legislature  has  not  inserted those  words  in the statute.  Such a course, would  not  be permissible  unless  there  is  anything  in  the   relevant provisions  which  may  show  that  the  intention  of   the legislature  was  that the value of an asset  would  be  the price fetched after deducting the sale expenses. It, no doubt, appears to be somewhat harsh that in computing the value of an asset only the price it would fetch if  sold in  the  open market has to be taken into  account  and  the expenses  which  would have to be borne in making  the  sale have to be excluded from consideration.  This, however, is a matter  essentially for the legislature. go, resort  can  be made to an equitable principle for there is no equity  about a  tax.  So far as the construction of section 7(1)  of  the Act is concerned, in view of its plain language, there is no escape  from the conclusion that the expenses  in  effecting the sale of the asset in the open market cannot be deducted. The  material  part of the language of section 7(1)  of  the Wealth-tax Act, 1957 is similar to that of sub-section (1)of section  36 of the Estate Duty Act which was brought on  the statute  book  earlier  in  1953.       Sub-section  (1)  of section36 of the Estate Duty Act reads as under

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                   "(1) The principal value of any property               shall  be estimated to be the price which,  in               the opinion of the Controller, it would  fetch               if sold in the open market at the time of  the               deceased’s death."               980               Section 48 of the Estate Duty Act was as under               "Where  the Controller is satisfied, that  any               additional  expense  in  administering  or  in               realising property has been incurred by reason               of. the property being .situate out of  India,               he may make an allowance from the value of the               property  on  account  of  such  expense   not               exceeding  in  any case five per cent  on  the               value of the property." On  account  of the similarly in language  of  the  material parts  of  section 7(1) of the Wealth Tax  Act  and  section 36(1)  of the Estate Duty Act, the value of on asset,  other than cash, for the purpose of section 7(1) of the Wealth Tax Act  should  be  the same as its value for  the  purpose  of section  36(1)  of the Estate Duty Act.  Section 48  of  the Estate Duty Act reproduced above allows a deduction up to  5 per  cent  on  account  of  expenses  for  administering  or realising  property situated out of India in  computing  the value of that property.  It would follow from the above that where  the legislature intended that allowance or  deduction should  be  made  from the value of  property,  it  made  an express  provision  to  that  effect.   The  fact  that   no provision was made in respect of expenses which may have  to be  borne by the assessee in effecting the sale of an  asset shows that in computing the value of an asset, such expenses cannot  be  deducted from the price which  the  asset  would fetch if sold in the open market. Section 36(1) of the Estate Duty Act was based upon  section 7(5) of the U.K. Finance Act, 1894 and section 60(2) of the. U.K.  Finance.   Act, 1910, while section 48 of  the  Estate Duty  Act  was based upon section 7(3) of the  U.K.  Finance Act,  1894.  According to section 7(5) of the  U.K.  Finance Act,  1894, "tile principal value of any property  shall  be estimated  to  be  the price which, in the  opinion  of  the commissioners, such property would fetch if sold in the open market  at the time of the death of the deceased".   Section 60(2)  of  the  U.K. Finance Act,  1910  provides  that  "in estimating the principal value of any property under section 7(5)  of the, principal Act the commissioners shall fix  the price  of the property according to the market price at  the time  of the death of the deceased, and shall not  make  any reduction  in the estimate on account of the estimate  being made  on the assumption that the whole property is  to  LI-. placed  on  the market at one and the same  time".   In  the context  (1) the above provisions, it has been  observed  on page 393 of Green’s Death Duties, Sixth Edition :                "The  price which property ’fetches’  is  the               gross  pi-ice paid by the  purchaser,  without               deduction for the vendor’s costs and expenses.               This is so, even where the property is subject               to  a trust for sale.  But if the property  to               be               981               valued is merely a share in an  unadministered               estate,  or in the proceeds of sale  of  trust               property  which  must  be  realised  for   the               purpose  of distribution, the expenses of  the               executors  or  trustees under  the  old  title               should be taken into account."

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The  matter  has been dealt with in Dymond’s  Death  Duties, Forteenth Edition,page 569 in the following words :               "The  price which the property fetches is  the               gross  sale price, without deduction  for  the               costs of sale, except that, if the property is               part of an unadministered estate or a share of               property   subject  to  a  trust  already   in               operation which involves conversion, or if the               property  consists, of certified  chattels  of               national, etc. interest (see P. 8 6 8    allowance               for costs may be made. The House of   Lords  had  to deal with this aspect  of  the matter in the case of    Duke,   of  Bucaleuch   v.   Inland Revenue  Commissioners. (1) After referring to section  7(5) of the U.K. Finance Act, 1894-Lord Reid observed:               "I am confirmed in my opinion by the fact that               the  Act permits no deduction from  the  price               fetched  of the expenses involved in the  sale               (except  in the case of property abroad  under               sub-section (3)               Lord Morris in this context observed:               "The value of a property is to be estimated to               be the price which it would ’fetch’ if sold in               the  open market at the time of the  death  of               the deceased.  This points to the price  which               a purchaser would pay.  The net amount that  a               vendor  would  receive would be  less.   There               would  be costs of and incidental to  a  sale.               It would seem to be harsh or even unjust  that               allowances cannot be made in respect of  them.               But   the  words  of  the  statute   must   be               followed." Similar  observations  were  made by Lord  Hodson  and  Lord Guest. We  are, therefore, of the view that the High Court  rightly answered  question  No.  (1)  relating  to  the  claim   for deduction  on  account of brokerage commission  against  the assessee. Question No. (3) pertains to the compensation payable to the assessee under the Bihar Land Reforms Act.  Two  contentions have been advanced on behalf of the appellant in this  Court with  regard  to the above question.  It is  argued  in  the first  instance  that compensation payable to  the  assessee under the Bihar Land (1)  [1967] A. C. 506. 982 Reforms  Act does not constitute ail asset as can  be  taken into account in computing the total wealth of the assessee.. In the alternative, it is urged that in computing the  value of compensation the Tribunal should have taken the value  to be  50  per  cent  and not 65 per  cent  of  the  amount  of compensation.  None of these contentions in our opinion,  is well founded.  The Bihar Land Reforms Act, 1950, (Bihar  Act 3 of 1950) provides for the transference to the State of the interests  of proprietors and tenure holders in land and  of other- interests in land.  According to section 3(1) of  the Act,  the  State  Government may, from  time  to  time,  ’by notification  declare that the estates or tenures of a  pro- prietor  or  tenure holder, specified in  the  notification, have  passed to and become vested in the State.   Section  4 enumerates the consequences of the’ vesting, of an estate or tenure in the State.  One of those consequences is that  the estate  or tenure, including the interest of the  proprietor or  tenure-holder  in such an estate or tenure  shall,  with effect  from  the date of vesting, vest  absolutely  in  the

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State  free  from all incumbrences and  such  proprietor  or tenure-holder  shall  cease to have any  interests  in  such estate  or tenure, other than the interests expressly  saved by  or  under the provisions of the Act.  Section  19  makes provision  for the appointment of Compensation  Officer  who shall in the case of an estate or tenure which has vested in the  State,  prepare  in the prescribed form  and  manner  a Compensation Assessment-roll containing the gross asset  and the  net  income  of each proprietor  and  tenure-holder  of estates  and  tenures  and the compensation to  be  paid  in accordance with the provisions of the Act to such proprietor or  tenure-holder and all other persons whose interests  are transferred to the State.  Section 23 prescribed the mode of computation  of net income, while section 24 gives the  rate of   compensation  and  the  mode  of   its   determination. According  to  section  26 there  should  be  a  preliminary publication  of  Compensation Assessment-roll.   Section  27 gives  a  right  of appeal from an order passed  by  a  Com- pensation  Officer to a Judge of the High Court.  After  all objections  and appeals have been disposed of, there has  to be  a final publication of the Compensation  Assessment-roll in  accordance  with  section 28 of  the  Act.   Section  32 provides  for the manner of payment of  compensation.   Sub- section (2) of that section reads.               "The  amount  of compensation  so  payable  in               terms  of  a Compensation  Assessment-roll  as               finally published shall be paid in cash or  in               bonds  or partly in cash and partly in  bonds.               The  bonds shall be either negotiable or  non-               negotiable and non-,transferable and be payable               in  forty  equal installments  to  the  person               named therein and shall carry interest at  two               and  a half per centum per annum  with  effect               from the date of issue."               983 Section  33  makes provision for ad interim payment  to  the proprietors after the date of vesting and before the day  of payment of compensation under sub-section (2) of section  32 of the Act. Perusal  of the different provisions of Bihar  Land  Reforms Act  shows  that  as  soon as the  estate  or  tenure  of  a proprietor or a tenure-holder vests in the State, he becomes entitled to receive compensation.  The fact that the payment of  compensation in terms, of the provisions of the Act  may be  deferred and be spread over a number of years  does  not affect  the right of the proprietor of tenure-holder to  the compensation.  The assessee, in our opinion. was vested with a right to get compensation immediately his land was  vested in  the State.  Section 2(e) of the Act defines "assets"  to include property of every description, movable or  immovable but  does  not include certain categories of  property  with which  we,  are  not concerned.   The  word  "property",  as mentioned  by this Court in the case of Ahemed G.  H.  Ariff and Others v. Commissioner of Wealth tax(1) is a term of the widest  import  and  subject to  any  limitation  which  the context  may require, it signifies every  possible  interest which  a person can clearly hold and enjoy.  The  definition of the "assets" as given in section 2(e) of the Act.  though not exhaustive shows its wide amplitude and we see no reason as  to  why  the right to  receive  compensation  cannot  be included amongst the assets of an assesee. According  to Mr. Kolah, the amount of compensation had  not be-en  determined  by the valuation date., and  as  such  it could not be included in the assets of the assessee.   There is,  however,  no material on the record to  show  that  the

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amount  of  compensation  had not  been  determined  by  the valuation  date.  The fact that the assessee had  originally shown the amount of compensation payable to be Rs. 92,27,422 in his return and it was only in the revised return that  he stated  that the amount of compensation payable to  him  had been  determined by the Compensation Officer to be  Rs.  36, 87,  419  would  not necessarily show  that  the  amount  of compensation had not been determined by the valuation  date. According  to  the  order  of the  Wealth  Tax  Officer  the contention  which was raised on behalf of the  assessee  was that  the compensation money should not be included  in  the total wealth because it was not known as to when and in what manner  the amount would be received.  The Appellate  Income Tax Tribunal in this context observed               "The  value  of  the  zamindary   compensation               payable to the assessee had been determined by               the  Compensation  Officer at  Rs.  36,87,419.               For  the purpose of assessment the Wealth  Tax               Officer had determined the               (1)   [1970] 76 I. T. R. 471.               984               value  at 75% of the compensation  determined.               This has been sustained on appeal by the  App.               Asst.  Commissioner who has found that a  part               of the compensation had been adjusted  against               Government dues outstanding from the assessee.               So,  the assessee is deemed to  have  received               full value for that part of the  compensation.               It is submitted on behalf of the assessee that               the  market  value  of  the  Bihar   Zamindary               Compensation bonds is about 50% of the  amount               of  the  bonds.  The Tribunal  has  taken  all               these facts into consideration in  determining               the  value of compensation payable  under  the               Bihar Land Reforms Act in the case of  several               assessees  and  the  Tribunal  has   generally               estimated  such value for Wealth Tax  purposes               at  65%  of  the amount  of  the  compensation               determined.  In this case also we would direct               that  the  valuation be taken at  65%  of  the               amount   compensation   determined   by    the               Compensation Officer." The  above observations as well as the form of question  No. (3)  show that no controversy was raised by the assessee  on the  score  that  the amount of compensation  had  not  been determined by the valuation date. Assuming  for  the  sake  of argument  that  the  amount  of compensation payable to the assessee had not been determined by the Compensation Officer by the valuation date, that fact would not justify the exclusion of the compensation  payable from  the  assets  of the assessee.  The  right  to  receive compensation  ’because vested in the assessee the moment  he was  divested of ’his estate and the same got vested in  the State  in pursuance of the provision of Bihar  Reforms  Act. As the estate of the assessee which vested in the State  was known  and as the formula fixing the amount of  compensation was  prescribed by the statute, the amount  of  compensation was  to  all intents and purposes a matter  of  calculation. The  fact that the necessary calculation had not  been  made and  the  amount of compensation had consequently  not  been quantified by the valuation date would not take compensation payable  to the assessee out of the definition of assets  or make  it  cease  to  be  property.   The  right  to  receive ,compensation  from the State is a valuable right,  more  so when  it is base(: upon statute and the liability to pay  is

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not  denied  by  the State.  It is no doubt  true  that  the compensation  is  not payable immediately  and  its  payment might  be  spread over a period of 40 years, but  that  fact would  be  relevant only for the purpose of  evaluating  the right  to  compensation.   It would not  ,detract  from  the proposition  that  the right to receive  compensation.  even though  the  date  of payment is deferred  is  property  and constitutes asset for the purpose of Wealth Tax Act. 985 The Patna High Court in the-case of Maharajkumar Kamal singh v. Commissioner of Wealth Tax (supra) held that the right to receive  compensation  under  the Bihar  Land  Refomrs  Act’ constituted "asset" for the purpose of Wealth Tax Act.   The view  taken  in that case was approved by a  Full  Bench  of Patna High Court in the case of Maharaj Kumar Kamal Singh v. Commissioner of Wealth Tax (1).  We see no cogent ground. to take  ’a different view.  It may also be observed  that  the Andhra  Pradesh High Court in five cases, namely, Mir  Imdad Ali Khan v. Commissioner Wealth Tax(2), Rani Bhagya Laxmamma v. Commissioner of Wealth Tax (3),  V.Chandramani  Pattamaba ’Devi  v. Commissioner of Wealth Tax(4),  Vandrevu  Venkappa Rao  v.  Commissioner of Wealth Tax(5) and P. V.  G.Raju  V. Commissioner of Wealth Tax(6) has held that the compensation payable  on  the  abolition of estates  can  be  taken  into account for the purpose of Wealth Tax Act.  Similar view has been taken by the Madhya Pradesh High Court in Sardar C.  S. Angre v. Commissioner of, Wealth Tax (7) and Allahabad  High Court  in Maharaja Pateshwari Pd.  Singh v. Commissioner  of Wealth Tax(8). Mr.  Kolah  has invited our attention to a decision  of  the Calcutta  High Court in the case of Commissioner  of  Wealth Tax v. U. C: Mahatab  (9) wherein that court held that  till the  final publication of the  Compensation  Assessment-roll under the west Bengal Estates Acquisition Act, the  assessee had no legal right to compensation and the same could not be included  in the’ definition of "assets" in the  Wealth  Tax Act.   It is, in our opinion. not necessary to  express  any view  with  regard  to the  correctness  of  that  decision. Suffice  it to say that the decision in that case  proceeded upon  the assumption that the provisions of the West  Bengal Estates Acquisition Act, 1953 were materially different from those of the Bihar.  Land Reforms Act.  It was, in fact,  on that  ground  that the learned Judges of the  Calcutta  High Court distinguished the case of Maharaj Kumar Kamal Singh v. Commissioner  of Wealth Tax (supra) as well as the  decision of  the Patna High Court which is now the subject matter  of the present appeal. We  are  also not impressed by the  contention  advanced  on behalf  of the appellant that the value of the  compensation should  have been determined for the purpose of  Wealth  Tax Act to be 50 per cent of the amount of compensation and  not 65 per cent. (1) [1972] 84 I. T. R 240 (2) [1963] 50 I. T. R. 216 (3) [1966] 62 I. T. R. 60 (4) [1967] 64 I. T. R. 147. (5) [1968] 69 I. T. R. 552. (6) [1970] 78 I. T. R. 60 (7) [1968] 69 I. T. R. 336. (8) [1970] 78 I. T. R. 581 (9) [1970] 78 I. T. R. 214. 5-797Sup.  Cl/73 986 As would appear from the order of the Tribunal, the value of compensation  payable under the Bihar Land Reforms  Act  has

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been  generally estimated for the purpose of Wealth Tax  Act to be 65 per cent of the amount of compensation  determined. We see no cogent ground to interfere in this respect. As a result of the above, we uphold the answers given by the High Court in respect of the first and third questions.   So far  as question No. (2) is concerned, we vacate the  answer given  by  the High Court and answer that  question  in  the affirmative  in  favour  of the  assessee.   The  appeal  is disposed of accordingly.  In the circumstances, the  parties are  left to bear their own costs of this’ Court as well  as in the High Court. S. C. 987