Disputed compensation and taxability during appeal: withdrawal on security did not make the amount taxable before final accrual.

Additional compensation in dispute during a pending State appeal did not finally accrue as income when it was deposited in court and allowed to be withdrawn on security. The governing principle stated is that disputed compensation is not taxable merely because it has been deposited or withdrawn before the appeal is finally resolved. On those facts, the compensation was not taxable at that stage.

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Issues: Whether additional compensation deposited in court and permitted to be withdrawn pending appeal was taxable at that stage.

Analysis: The additional compensation was under dispute in the appeal filed by the State Government and, on the facts, had not finally accrued as income when it was deposited in court and allowed to be withdrawn on security. The governing principle was that disputed compensation does not become taxable merely because it has been deposited or withdrawn during the pendency of the appeal.

Conclusion: The additional compensation was not taxable at that stage, and the appeal failed.

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