Rakesh Kumar Garg, J.
1. This judgment will dispose of WT Ref. Nos. 96 to 103 of 1988 arising out of 24 reference applications in WT Case Nos. 13 of 1984, 20 of 1985, 21 of 1985 (Shanti Parshad Jain v. CWT), 10 of 1984, 36 of 1985, 37 of 1985 (CWT v. Shanti Parshad), WT Case Nos. 14 of 1984, 27 of 1985, 28 of 1985 (Jainender v. CWT) 9 of 1984, 34 of 1985, 34 of 1985 (CWT v. Jainender), WT Case Nos. 12 of 1983, 22 of 1985, 23 of 1985 (Salinder Kumar Jain v. CWJ), WT Case Nos. 11 of 1983, 32 of 1985, 33 of 1985 (CWT v. Salinder), WT Case Nos. 24 of 1985, 25 of 1985, 26 of 1985 (D.P. Jain v. CWT), WT Case Nos. 29 of 1985, 30 of 1985, 31 of 1985 (CWT v. D.P. Jain) for the asst. yrs. 1976-77, 1977-78, 1978-79 and WT Ref. Nos. 92 to 95 of 1988 for the asst. yrs. 1974-75, 1975-76, 1979-80 and 1980-81, as the common questions of law have been referred by the Tribunal arising out of the same facts pertaining to all the assessees.
2. Shri Shanti Parshad Jain and his three sons, namely, Shri Jainender Kumar Jain, Shri Satinder Kumar Jain and Shri Devinder Parshad Jain, owned certain pieces of land in Hissar. Though in the beginning there was some dispute about the ownership of these lands but now it is an accepted position that all the four persons had l/4th share in those pieces of land.
3. The wealth-tax assessments for the asst. yrs. 1974-75, 1975-76, 1976-77, 1977-78, 1978-79, 1979-80 and 1980-81 are the subject-matter under consideration. The IAC found that the lands in question had been acquired by the Collector on 4th Sept., 1973 and the compensation awarded to Shri Shanti Parshad Jain, for his share was Rs. 1,12,928. Similar amounts had been awarded to the other members of the family. These amounts had been received prior to the relevant valuation dates, which fell on 31st March, 1976, 31st March, 1977 and 31st March, 1978. The amounts received were reflected in the wealth of these persons. There is no dispute regarding this aspect.
4. Shri Shanti Parshad Jain and his sons were not satisfied with the Collector's award and they made a claim for higher compensation. The Addl. District Judge, Hissar on the basis of evidence produced by the assessee awarded additional compensation on 23rd Jan., 1979 which was after the three relevant valuation dates. Interest on the enhanced compensation was also awarded. The additional compensation was determined at Rs. 7,97,558 and the interest upto 31st March, 1976 was determined at Rs. 1,23,117. Both the parties were aggrieved against this order of the Addl. District and Sessions Judge and filed appeals before the Punjab & Haryana High Court. Shri Shanti Parshad Jain and his sons claimed a further sum of Rs. 2 lakhs as compensation, whereas the Government challenged the enhanced compensation awarded to these persons. These appeals were pending at the time of making of the wealth-tax assessments.
For the purpose of making assessment under the WT Act, the IAC was of the view that the assessee's right to receive additional compensation was to be included in his wealth on the valuation date of 31st March, 1976. The assessee had not declared any value for this right and has claimed nil value.
The IAC relied on the compensation determined by the Addl. District & Sessions Judge, Hissar as he found that that was the order which still holds the field. He pointed out the fact that the assessee had received an additional compensation as well as interest and damages totalling Rs. 9,76,943 and in addition to it the assessee was further claiming Rs. 2 lakhs as further compensation. The IAC was of the view that having regard to the hazards of litigation, the value of the assessee's right could be determined at Rs. 9 lakhs which the assessee was seeking before the High Court. Similar amounts were included in the assessments of the other parties in the asst. yr. 1976-77.
5. When the matter came up before the Commissioner of Wealth-tax (for short the 'CWT) in cases other than the case of Shri D.P. Jain, CWT(A) has upheld the action of the IAC, while relying on a circular of the Board dt. 15th Nov., 1973. However, in the case of Shri D.P. Jain, the CWT(A) adopted the value at 20 per cent of the total compensation and allowed assessee's ground.
In respect of the asst. yrs. 1977-78 and 1978-79 the WTO had passed the order on the basis of orders passed for the earlier year. For similar reasons as given in the order of earlier year, the WTO determined the value of the assessee's right to receive compensation on 31st March, 1977 at Rs. 10,24,795 which the assessee had received as per directions of the Addl. Sessions Judge and also having regard to the further claim of Rs. 2 lakhs pending before the High Court. For the asst. yr. 1978-79 the value was estimated at Rs. 10 lakhs. The gradual increase was mainly due to the factor of interest and damages. Similar value was adopted in the cases of all the four persons. In these assessment years the CWT(A) following the orders of the Tribunal for the asst. yr. 1976-77 adopted the value at 20 per cent of the additional compensation.
In those later years viz., 1977-78 and 1978-79 both the sides came up in appeal before the Tribunal, whereas in the asst. yr. 1976-77 only the assessees had come up in appeal before the Tribunal.
6. In respect of the asst. yr. 1976-77 the Tribunal after giving the background of the case pointed out that the assessee had on the valuation dates a right to receive compensation, though the order of acquisition had been struck down and it was in further appeal. According to the Tribunal, the question for consideration was the value of the assessee's rights on the valuation dates. In this connection, the Tribunal referred to the order of the Bench of the Tribunal at Hyderabad where under similar circumstances, the matter had been considered and a sort of formula had been laid down. Having regard to the delay in the settlement of the matters and the other hazards, the Hyderabad Bench had determined that the value was to be taken at 20 per cent of the additional compensation in the first year under consideration and an increasing percentage in the later years. The Tribunal noted that the counsel for the assessee had adopted the same posture for the purpose of determination of the value and the Department had relied on the orders of the authorities below. As the facts in this case were similar, the Tribunal directed that the value of the assessee's right on the relevant valuation date should be taken at 20 per cent of the amount of compensation awarded by the civil Court.
7. In respect of asst. yrs. 1977-78 and 1978-79 against the orders of the Tribunal, both the sides had filed reference applications before the Tribunal. The reference applications of both the parties had been rejected by the Tribunal on the ground that the issue decided by the Tribunal was a question of fact and not a question of law. The Tribunal, therefore, followed the direction of the earlier year for taking the value at 20 per cent of the enhanced compensation on the relevant valuation dates. The Tribunal held that the principles followed by the Tribunal had been laid down by the Supreme Court and the determination of the value on these principles was a question of fact. Hence, the questions were not referred. However, as per the direction of this Court the following common questions were referred by the Tribunal for our opinion in WT Ref. Nos. 96 to 103 of 1988:
Common question for Departmental reference applications:Whether on the facts and in the circumstances of the case, the order of the Tribunal in fixing the value of right to compensation at 20 per cent is vitiated by ignoring the legal and admissible material and acceptance of irrelevant considerations?
Common questions in assessees' reference applications:
(i) Whether on the facts and in the circumstances of the case, the Tribunal was legally correct in law in upholding the inclusion, in the net wealth at 20 per cent of the amount of compensation awarded by the civil Court being the value of the right to receive the enhanced compensation in the hands of the assessees specially when the acquisition was set aside by the civil Court by its order dt. 7th March, 1983?
(ii) Whether the Tribunal was legally justified in fixing the percentage of 20 per cent of the amount of compensation awarded by the civil Court being the value of the right to receive the enhanced compensation as the wealth of the assessee on the valuation date, against the value declared by the assessees at nil?
8. It may be mentioned here that in the cases of these very assessees for theasst. yrs. 1974-75, 1975-76, 1979-80 and 1980-81, the Tribunal vide its order dt. 17th Nov., 1986 after relying upon its decision for the asst. yr. 1976-77 held that 20 per cent of the total compensation, interest, damages etc., is to be a valuation which merits to be taken in computation in the hands of the assessee for the purposes of its charge to wealth-tax under the provisions of the WT Act, 1957. However, the Revenue filed reference applications and the Tribunal vide its order dt. 31st Dec., 1987 referred to this Court the following question of law which is identical to the question of the law as referred to by the Tribunal at the asking of the Revenue in WT Ref. Nos. 92 to 95 of 1988:
Whether on the facts and in the circumstances of the case, the order of the Tribunal in fixing the value of right to compensation at 20 per cent is vitiated by ignoring the legal and admissible material and acceptance of irrelevant considerations?
9. Before adverting to the question of law as referred to this Court, the following facts are also necessary to be mentioned:
(i) It is relevant to mention here that in the case of the assessee itself for the subsequent years, i.e., 1983-84 onwards, the Tribunal assessed the value of right to receive additional compensation at nil amount on the ground that the market value of the right to receive such compensation was nil on the valuation date. This decision rendered by the Tribunal for the said assessment years was not questioned by the Department/Revenue by way of reference and was allowed to attain finality.
(ii) It would also be pertinent to mention here itself that for the asst. yr. 1989-90, the AO while framing/finalizing the assessment for the said assessment year under Section 16(3) of the Act, has accepted the value of the right to receive compensation at nil amount as declared by the assessees.
(iii) The land owned by Smt. Kapoori Devi wife of Shri Shanti Parshad Jain was also acquired by the State of Haryana vide the same notification as was in the case of Shri Shanti Parshad Jain. The facts and circumstances prevailing in the case of Smt. Kapoori Devi Jain and Shri Shanti Parshad Jain on the basis of which assessments were framed under the Act are identical. In the case of Smt. Kapoori Devi, the Tribunal vide orders dt. 17th Oct., 1995 and 3rd Feb., 2003 for the asst. yrs. 1979-80, 1981-82 to 1985-86, 1986-87, 1987-88 and 1989-90 dismissed the appeals filed by the Revenue. The orders passed by the Tribunal in Smt. Kapoori Devi's case on the strength of the principle of law laid down in the cases of Jaswant Rai v. CWT and Mrs. Khorshed Shapoor Chenai v. Asstt. CED : [1980]122ITR21(SC) have been accepted by the Department/Revenue as the same has attained finality in view of the fact that no reference application was filed under the Act.
(iv) Similarly, in the case of Shri Satinder Kumar Jain, one of the assessees in the consolidated reference bearing Nos. 96 to 103 of 1988, for the asst. yr. 1981-82, the Department/Revenue has not filed any reference or appeal against the order of the Tribunal holding the value of the right to receive additional compensation as nil by virtue of applicability of Section 7 of the Act.
10. We have heard learned Counsel for the parties and perused the record.
11. The question of law on which reference has been sought by the Department/Revenue in the instant cases no longer survives for consideration by this Hon'ble Court on merits, in view of the fact that in the subsequent years in the case of the assessees itself including the co-assessees, i.e., Smt. Kapoori Devi Jain wife of Shri Shanti Parshad Jain and Satinder Kumar Jain son of Shri Shanti Parshad Jain, the right to receive compensation has been determined at nil amount, which orders have attained finality. The subsequent orders passed in favour of the assessees are based on the earlier orders passed by the Tribunal in its favour. There is no reason given by the Revenue for this pick and choose attitude or this attitude of accepting favourable order in respect of one assessee but not accepting the same favourable order in respect of other assessee, without there being any distinction between their cases. In view of the arbitrary manner of proceeding in the matter, it will not be proper or in the interest of justice to allow the Revenue to recover tax from one assessee while deciding not to recover tax from another assessee on identical facts. Reliance is placed on Union of India v. Satish Panalal Shah : [2001]249ITR221(SC) wherein the Supreme Court had deprecated the practice of the Revenue in accepting the correctness of a particular issue in one case and challenging its correctness in another case. The Department/Revenue cannot be allowed to take the plea that every assessment year is an independent year and there is no resjudicata or estoppel applicable to the statutory provisions, in cases, where for subsequent years, appeals may not have been filed, like in the case of the assessees herein, does not merit acceptance in view of the principle of consistency. Since the Revenue has accepted the orders of the Tribunal in the subsequent years in the case of the assessees for the asst. yr. 1983-84 onwards and in the case of the co-assessees namely, Smt. Kapoori Devi and Jaininder Kumar Jain etc. for the earlier assessment years, therefore, it cannot be allowed to challenge the earlier order in respect of some assessees or in respect of a random assessment year, inasmuch as, if given the sanctity to do so would entail pick and choose leading to an arbitrary exercise of power. Reliance for the aforesaid submission is placed on the cases of CIT v. R.K.K.R. International (P) Ltd. (2005) 145 Taxman 322 (Del) and CIT v. Muthoot M. George Bankers (2007) 159 Taxman 22 (Del).
12. The Hon'ble Supreme Court of India in the case of Berger Paints India Ltd. v. CIT : [2004]266ITR99(SC) has observed that if the Revenue has not challenged the correctness of the law laid down by the High Court and has accepted it in the case of one assessee then it is not open to the Revenue to challenge its correctness in the case of other assessees, without just cause. No doubt, by the Finance Act, 2008, Section 268A has been inserted with retrospective effect from 1st April, 1999 as under:
268A. Filing of appeal or application for reference by IT authorities.-(1) The Board may, from time to time, issue orders, instructions or directions to other IT authorities, fixing such monetary limits as it may deem fit, for the purpose of regulating filing of appeal or application for reference by any IT authority under the provisions of this chapter.
(2) Where, in pursuance of the orders, instructions or directions issued under Sub-section (1), an IT authority has not filed any appeal or application for reference on any issue in the case of an assessee for any assessment year, it shall not preclude such authority from filing an appeal or application for reference on the same issue in the case of
(a) the same assessee for any other assessment year; or
(b) any other assessee for the same or any other assessment year.
(3) Notwithstanding that no appeal or application for reference has been filed by an IT authority pursuant to the orders or instructions or directions issued under Sub-section (1), it shall not be lawful for an assessee, being a party in any appeal or reference, to contend that the IT authority has acquiesced in the decision on the disputed issue by not filing an appeal or application for reference in any case.
(4) The Tribunal or Court, hearing such appeal or reference, shall have regard to the orders, instructions or directions issued under Sub-section (1) and the circumstances under which such appeal or application for reference was filed or not filed in respect of any case.
(5) Every order, instruction or direction which has been issued by the Board fixing monetary limits for filing an appeal or application for reference shall be deemed to have been issued under Sub-section (1) and the provisions of Sub-sections (2), (3) and (4) shall apply accordingly.
13. For the disposal of these references the ratio of law laid down by the Hon'ble apex Court in the case of Berger Paints India Ltd. (supra) still holds the field as the new law has been made effective w.e.f. 1st April, 1999 whereas in the instant references, the relevant assessment years are prior to 1st April, 1999. Even otherwise, the Revenue has not come forward to plead any instructions/directions or the circumstances under which such appeals or applications for reference were not filed in respect of the cases as mentioned above in the foregoing paras.
14. In this view of the factual position pertaining in the matter and in view of the principle of law laid down by the Hon'ble Supreme Court in the case of Berger Paints India Ltd. (supra), and the fact that the Department has not challenged the correctness of the order passed by the Tribunal in the subsequent years and has accepted the same, the question of law referred to at the instance of the Department/Revenue deserves to be answered in negative, i.e., in favour of the assessees and against the Department/Revenue.
15. Thus, question of law as raised by the Revenue is answered in the negative, i.e., against the Revenue and in favour of the assessee.
16. Since we are upholding the order of the Tribunal in fixing the value of right to compensation at 20 per cent, the questions of law referred to this Court at the behest of the assessee are also liable to be answered in the affirmative, i.e., in favour of the Revenue and against the assessee.
The wealth-tax references are answered accordingly.