Taxability of disputed enhanced compensation turns on finality, and pending challenge prevents it from becoming taxable wealth.

Enhanced compensation for compulsorily acquired land does not form part of taxable wealth while the State's challenge to the enhancement remains pending. The enhancement is not finally vested in the recipient until a superior court affirms it, so a disputed amount cannot be treated as a taxable asset merely because it was provisionally allowed against security. The stated principle is that compensation must attain finality and become finally payable before it can be brought into income-tax or wealth-tax computation; on that basis, the issue was resolved in favour of the assessee.

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Issues: Whether the enhanced compensation received or receivable on compulsory acquisition of land, while the State's appeal against the enhancement remained pending, formed part of the assessee's taxable income or taxable wealth.

Analysis: The enhanced amount was not finally vested in the assessee while the State's challenge to the High Court's enhancement remained unresolved. Until the superior court affirmed the enhancement, the amount could not be treated as belonging to the assessee for wealth-tax purposes. The decision relied on the principle that a disputed compensation amount does not accrue as income or become a taxable asset merely because it has been provisionally allowed against security.

Conclusion: The enhanced compensation did not form part of the assessee's taxable wealth while the appeal against enhancement was pending, and the issue was answered in favour of the assessee.

Ratio Decidendi: A disputed enhancement of compensation for acquired land does not constitute taxable income or wealth of the recipient until the enhancement attains finality and the amount becomes finally payable to the assessee.

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