Enhanced land acquisition compensation not taxable in assessment year 1990-91 where receipt and accrual fell outside the relevant year.

Enhanced compensation from land acquisition could not be taxed in assessment year 1990-91 because the Tribunal found that the enhancement order was made on 10 October 1986 and the amount was received on 28 December 1988, outside the relevant previous year. On those unchallenged findings, the sum was not taxable either on accrual basis or on receipt basis, and no substantial question of law arose under section 260A of the Income-tax Act, 1961. The addition was therefore not sustainable and the appeal was dismissed.

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Issues: Whether enhanced compensation received on acquisition of land could be taxed in assessment year 1990-91 in an appeal under section 260A of the Income-tax Act, 1961.

Analysis: The Tribunal had found that the order enhancing compensation was made on 10 October 1986 and that the enhanced compensation was received on 28 December 1988. On those findings, the amount did not fall within the relevant previous year for assessment year 1990-91 and could not be brought to tax either on accrual basis or on receipt basis. Those findings were not under challenge, and no substantial question of law arose from the Tribunal's order.

Conclusion: The addition on account of enhanced compensation was not sustainable in assessment year 1990-91, and the appeal was dismissed.

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