JUDGMENT

SABYASACHI MUKHARJI, J. :—These appeals by certificates arise against a decision of the Full Bench of the Patna High Court. Several questions were referred to the High Court of Patna under Section 27 (1) of the Wealth-tax Act, 1957, hereinafter referred to as the Act. Two of these questions have been answered against the assessee, one was held to be not entertainable and one misconceived. The question answered against the revenue in that reference before the High Court was question No. (iii) mentioned in the judgment of B. D. Singh. J. and the question is as follows :-

"Whether, on the facts and circumstances of the case. the Tribunal was right in including in the assessees net wealth a positive figure, on account of Zamindary compensation without taking into consideration the arrears of agricultural income-tax instead of taking the figure of compensation receivable from Government of Bihar at nil."

2. In order to appreciate the question, it may be necessary to refer to some facts. The question involved before the Full Bench was for the assessment years 1959-60, 1960-61, and 1961-62. corresponding valuation dates of which were the 31st October, 1958, 3rd October, 1959 and 31st October, 1960. The assessee is an individual. His estate vested in the State of Bihar under the Bihar Land Reforms Act, 1950 on and from 1st July, 1952, and he is entitled to receive compensation under the Act from the government. Under Section 3 of the Act, the question arose about the inclusion in the assessees "net wealth" the value of the estimated amount of compensation receivable by him from the Bihar Government under the Bihar Land Reforms Act, 1950. In the assessment year 1959-60, the W. T. Officer estimated the value at Rs. 10,25,123-00 and included it in the net wealth of the assessee. For the assessment years 1960-61 and 1961-62, the assessee produced a letter from the District Collector, Arrah, to show that the assessee is entitled to compensation of Rupees 4,39,713-00 only. The Wealth-tax Officer estimated 75% thereof as the market value of the right of the assessee to receive the compensation. Accordingly he included in the assessees net wealth Rs. 3,29,784-00. On appeal, the Appellate Assistant Commissioner reduced the valuation for the first year to Rupees 3.29.784-00. For the next two years, namely 1960-61 and 1961-62, the Appellate Assistant Commissioner held that it would be reasonable to estimate the market value of the compensation to be received by the assessee at 65% of the face value.

3. The assessee preferred appeals before the Appellate Tribunal regarding assessments for the aforesaid three years and reiterated his contention that the right to receive compensation under the Land Reforms Act was not an asset within the meaning of Section 2 (m) of the Act and could not be included in the assessees net wealth. The Tribunal held that the estimated amount of Zamindari compensation payable to the assessee was an asset and had to be included in the assessees net wealth. However, it directed the Wealth-tax Officer to estimate the value and compensation to be received by the assessee at 65% even for the first year. i.e. 1959-60, as was done by the Appellate Assistant Commissioner with regard to the second and third years i.e. 1960-61 and 1961-62.

4. The contention of the assessee further was that the unpaid agricultural income-tax as a debt was deductible while computing his net wealth.His claim was that this debt was Rs. 5.10.831-00 in the first year, Rs. 4,76,461-00 in the second year and Rs. 4,75,906-00 in the third year. A sum of Rs. 24,430-00 being agricultural income-tax demand for 1363 Fasli was allowed to be deducted by the Wealth-tax Officer. For the second and third years arrears of agricultural income-tax, the assessee had produced Government letter to show that the amount of compensation receivable by the assessee would be nil. According to the enquiries from the revenue department it also appeared that the final compens