SMT. SARDA DEVI SINGHANIA v. WEALTH-TAX OFFICER
[Citation -1985-LL-0725-6]

Citation 1985-LL-0725-6
Appellant Name SMT. SARDA DEVI SINGHANIA
Respondent Name WEALTH-TAX OFFICER
Court ITAT
Relevant Act Wealth-tax
Date of Order 25/07/1985
Assessment Year 1975-76
Judgment View Judgment
Keyword Tags right to receive compensation • land acquisition officer • development authority • wealth-tax assessment • valuation officer • mistake apparent • wealth-tax act • valuation date • mistake of law
Bot Summary: The WTO held that the asset held by the assessee was not any land but she had only a right to receive compensation in respect of that land. In the present application, it is pointed out that although the Land Acquisition Officer had passed the order of acquisition on 21st July, 1965, under s. 11 of the Land Acquisition Act, 1894, the Collector had not taken possession of the land under s. 16 of the above Act till December, 1976. These facts clearly go to show that on 31st March, 1975, which is the valuation date for the assessment year under appeal, the possession of the land had not been taken by the Collector either under s. 16 or under s. 17 of the Land Acquisition Act. Counsel for the assessee also referred to the following decisions of the Supreme Court, which clarify as to what is meant by taking possession and what are the modes of taking possession of the acquired land by the Collector under the Land Acquisition Act: Jetmull Bhojraj vs. State of Bihar AIR 1972 SC 1363 Balwant Narayan SCC 700. As the land acquired vests absolutely in the Government only after the Collector has taken possession of it, no interest therein will be outstanding in the claimant after the taking of such possession, he is divested of his title to the land and his right to possession thereof, and both of them vest thereafter in the Government. Under s. 16 of the Act when the Collector has made an award under s.11 he may take possession of the land which shall thereupon vest absolutely in the government free from all encumbrances under s. 17 thereof: In cases of urgency, wherever the appropriate government so directs the Collector, though no such award has been made, may, on the expiration of fifteen days from the application of the notice mentioned in s. 9, sub-s., take possession of and waste or arable land needed for public purposes or for a company. As the land acquired vests absolutely in the Government only after the Collector has taken possession of it, no interest therein will be outstanding in the claimant after the taking of such possession, he is divested of his title to the land and his right to possession thereof, and both of them vest thereafter in the government.


ALLAHABAD B BENCH SMT. SARDA DEVI WEALTH-TAX v. SINGHANIA OFFICER July 25, 1985 JUDGMENT Order PRAKASH NARAIN, A. M. - above appeal was decided by Tribunal 27th July, 1981. assessee has moved miscellaneous application dt. 29th Feb., 1984, which was received in office of Tribunal on 4th April, 1984. Through this application, assessee has pointed out that there was mistake apparent from record in order of Tribunal, which require rectification. We briefly state facts leading to above application. assessee owned certain agricultural lands in village of district Kanpur. said land was acquired by Kanpur Development Authority vide its Notification in 1959 in terms of land Acquisition Act, 1894. value of said land was fixed by Land Acquisition Officer at Rs. 23,309 vide his Award No. 141 dt. 21st July, 1965. assessee appealed against award and claimed that sum of Rs. 5,45,000 should be awarded to her, as cost of land. said appeal is still pending. In her wealth-tax return for above assessment year assessee declared value of above land at Rs. 46,725 and claimed that being less than Rs. 1,50,000, it was exempt from WT under s. 5 (1) (iva) of WT Act, 1957. WTO held that asset held by assessee was not any land but she had only right to receive compensation in respect of that land. He valued this right at Rs. 2,25,000 including interest due to her form Land Acquisition Officer and included it in assessment. assessee appealed to CIT (A). it was again reiterated before him that asset held by assessee was agricultural land and not any right to compensation from government and, therefore, its value being Rs. 46,725 was exempt from wealth-tax. It was also submitted before him that even if assessee had only right to receive compensation, its value could not exceed Rs. 23,309 as determined by Land Acquisition Officer. It was further submitted that if WTO wanted to reject assessee s valuation proper course for him was to refer matter to Valuation Officer under s. 16-A of WT Act. CIT (A) did not accept above contention. He was of opinion that right to receive compensations could not be equated with holding of agricultural land, and, therefore, exemption under s. 5(1) (iva) of WT Act was not available to assessee. On his part, he valued assessee s right to compensation at Rs. 2 lacs resulting in relief of Rs. 25,000. He also rejected assessee s contention that reference to Valuation Officer was necessary. He, thus confirmed order of WTO principle. Against above findings of CWT (A), assessee appealed to Tribunal. submissions placed before CIT (A) were repeated before Tribunal. It was first contended that as on valuation date, assessee only had agricultural land as her asset and that right to compensation had not arisen. It was next contended that alternatively authorities had no jurisdiction to increase value of compensation over and above amount of Rs. 23,309. With regard to first contention, Tribunal held as under: "14. We have carefully examined facts on record and have given our anxious consideration to rival submissions. There is in our opinion, no merit in contention of assessee that as on valuation date under consideration, she still held agricultural land as her asset. said agricultural land had already been acquired and award with regard to compensation payable in respect thereof had been given by Land Acquisition Officer vide his order No. 141 dt. 27th Aug., 1965. asset. Therefore, held by assessee on valuation date was right to receive compensation. It was not same thing as agricultural land and, therefore, question of any exemption being available to assessee under s. 5 (1) (iva) of WT Act, 1957 did not arise." With regard to second contention, Tribunal relying on decision of Supreme Court in case of Mrs. Khorshed Shapoor Chenai vs. Asstt. CED (1980) 14 CTR (SC) 356: (1980) 122 ITR 21 (SC) restored question of valuation of right to receive compensation to WTO. Tribunal directed WTO to go into above question and if necessary take help question and if necessary take help of Valuation Officer for finding out proper value of right to receive compensation. Tribunal also rejected contention of assessee that value as determined by Land Acquisition Officer was correct value of right to receive compensation which alone could be included for purposes of wealth-tax. In present application, it is pointed out that although Land Acquisition Officer had passed order of acquisition on 21st July, 1965, under s. 11 of Land Acquisition Act, 1894, Collector had not taken possession of land under s. 16 of above Act till December, 1976. This fact is not in dispute. It is no record that assessee had shown income from agriculture even in asst. yrs. 1975-76 and 1976-77 which was accepted by ITO. This fact was brought to notice of CIT(A). It was also submitted before him that in wealth-tax assessment for asst. yr. 1974-75, WTO had assessee having shown above assets as agricultural land in return and had completed assessment accordingly. These facts clearly go to show that on 31st March, 1975, which is valuation date for assessment year under appeal, possession of land had not been taken by Collector either under s. 16 or under s. 17 of Land Acquisition Act. On basis of above facts, it is pointed out in application that land in question could not be said to have vested in Government. ld. counsel for assessee invited our attention to s. 16 of Land Acquisition Act. It states that when Collector has made award, he may take possession of land which shall thereupon vested absolutely in government free from all incumberances. Shri Unni, counsel for assessee also pointed out that controversy regarding above issue had been set at rest by decision of Supreme Court in case of Dr. Sham Lal Narula vs. CIT (1964) 53 ITR 151 (SC). He, therefore, submitted that Tribunal having not followed above decision of Supreme Court, there was mistake apparent from record requiring rectification by us. ld. counsel for assessee also referred to following decisions of Supreme Court, which clarify as to what is meant by taking possession and what are modes of taking possession of acquired land by Collector under Land Acquisition Act: (1) Jetmull Bhojraj vs. State of Bihar AIR 1972 SC 1363 (2) Balwant Narayan (1976) SCC 700. On behalf of Department, it was not disputed that land acquired vested absolutely in Government, only after Collector had taken possession. ld. Departmental Representative, however, submitted that it could not be treated as mistake apparent from record in view of principle laid down by Supreme Court in ITO vs. V. Volkart Bros. (1971) 82 ITR 501 (SC) and, therefore, there was no question of rectifying order of Tribunal. He further submitted that it was settled principle of law that Tribunal had no power to revise its order in garb of rectifying mistake. We have give our careful thought to entire matter. We have already stated above that there is no dispute before us that possession of land was not taken by Collector upto 31st March, 1975. possession was actually taken in December, 1976 i.e. after valuation date. principle laid down by Supreme Court in case of Dr. Sham Lal Narula (supra) will, therefore, apply to case. said principle is mentioned at page 154 of report in following words: "Under both section (ss. 16 and 17of Land Acquisition Act, 1894), land acquired vests absolutely in government after Collector has taken possession in one case after making of award and in other, even before making of award. In either case, some time may lapse between taking of possession of acquired land by Collector and payment or deposit of compensation to person interested in land acquired. As land acquired vests absolutely in Government only after Collector has taken possession of it, no interest therein will be outstanding in claimant after taking of such possession, he is divested of his title to land and his right to possession thereof, and both of them vest thereafter in Government. Thereafter he will be entitled only to be paid compensation that has been or will be awarded to him. He will be entitled to compensation, though ascertainment thereof may be postponed, from date his title to land and right to possession thereof have been divested and vested in government." On basis of above principle, there cannot be two opinions that land acquired did not vest absolutely in government on valuation date. As Collector had taken its possession only after that date. assessee, therefore, continued to remain owner of land on valuation date. It is value of this land alone which could be included as asset in assessment of wealth-tax. Tribunal has, therefore, rendered wrong decision contrary to settled principle of law. That in our opinion, is mistake apparent from record. mistake no doubt is one of law. Before we actually direct amendment of order of Tribunal, we will like to discuss question whether it could also be treated as mistake apparent from record justifying action under s. 254 (2) of IT Act. Supreme Court in case of Volkart Bros. (supra) has held that mistake apparent on record must be obvious and patent mistake and not something which can be established by long drawn process of reasoning on points on which there may be conceivably two opinions. decision on debatable point of law is not mistake apparent from record. In our opinion, this principle is violated in present case. After decision of Supreme Court in case of Dr. Shamlal Narula (supra), it cannot be said that there is any debatable point of law or that there can be two opinions on issue. There is also no longer any necessity of long drawn process of reasoning. Supreme Court in case of M. K. Venkatachalam vs. Bombay Dyeing & Manufacturing Co. Ltd. (1958) 34 ITR 143 (SC) had held that mistake may either be of law or of fact and that clear and obvious mistake of law can be rectified, as much as mistake of fact apparent from record. issue has been made much clear by Supreme Court in case of Tungabhadra Industries Ltd. vs. Government of A. P. AIR 1964 SC 1372. It was held in this case that where without any elaborate argument one could point out to error and say "here is substantial point of law. which stairs one in face and there could reasonably be no two opinions entertained about it", it clear case of error apparent on face of record would be made out. Sec. 254(2) of Act would of course not be applicable where there is no settled principle of law and Tribunal would be changing its own view or if there could possibly be two views. and one of them might be adopted. That position would be outside scope of s. 254(2) of Act. law declared by Supreme Court is binding on all Courts within territory of India under Art. 141 of Constitution and obviously omission to follow it would be mistake of law rectifiable under s. 254(2) of Act. We, therefore, delete paragraphs 14 to 16 of order of Tribunal dt. 27th July, 1981 and direct that following paragraph be substituted and numbered as paragraph 14: "14. We have carefully, examined facts on record and have given our anxious consideration to rival submissions. It is on record that possession of land in question had not been taken by Collector on valuation date i. e. 31st March, 1975. In that situation, principle laid down by Hon ble Supreme Court in case of Dr. Shamlal Narula vs. CIT 53 ITR 151(SC) will apply to case. At page 154 of report, Court has held as under: "Another approach to problem leads to same result. Under s. 16 of Act when Collector has made award under s.11 he may take possession of land which shall thereupon vest absolutely in government free from all encumbrances under s. 17 thereof: "In cases of urgency, wherever appropriate government so directs Collector, though no such award has been made, may, on expiration of fifteen days from application of notice mentioned in s. 9, sub-s. (1), take possession of and waste or arable land needed for public purposes or for company. Such land shall thereupon vest absolutely in government, free from all encumbrances". Under both section land acquired vests absolutely in government after Collector has taken possession in one case after making of award, and in other, even before making of award. In either case, some time may lapse, between taking of possession of acquired land by Collector and payment or deposit of compensation to person interested in land acquired. As land acquired vests absolutely in Government only after Collector has taken possession of it, no interest therein will be outstanding in claimant after taking of such possession, he is divested of his title to land and his right to possession thereof, and both of them vest thereafter in government. Thereafter he will be entitled only to be paid compensation that has been or will be awarded to him. He will be entitled to compensation, though ascertainment thereof may be postponed, from date his title to land and right to possession thereof have been divested and vested in government." Following above principle, we hold that assessee continued to remain owner of agricultural land on valuation date. Since value of land was Rs. 46,725 which was less than Rs. 1,50,000, it was exempt from WT under s. 5(1) (iva) of wealth-tax Act, 1957. We. therefore, direct deletion of Rs. 2 lakhs from assessment. Paragraphs 17, 18, 19, 20, 21 and 22 of order will be re-numbered as paragraphs 15, 16, 17, 18, 19 and 20. In result, application is allowed. *** SMT. SARDA DEVI SINGHANIA v. WEALTH-TAX OFFICER
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