Accrual of interest on enhanced compensation must be spread year by year, not taxed wholly when enhancement is ordered.

Interest on enhanced compensation for acquired land accrues year by year from the date possession is taken until the court orders enhancement, rather than arising only on the date of the award. On that principle, the full interest could not be assessed in a single year merely because the civil court granted enhanced compensation during that year. The amount had to be apportioned on an accrual basis across the relevant years, and was not wholly taxable in the assessment year in which the enhancement order was made.

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Issues: Whether interest on enhanced compensation for acquired land was assessable in the assessment year in which the civil court awarded enhanced compensation, or had to be treated as accruing year after year from the date of delivery of possession till the date of the court order.

Analysis: The applicable principle was governed by the Supreme Court's rule that interest on enhanced compensation does not accrue only on the date of the court's award. Instead, it accrues progressively each year from the date possession of the lands is taken until the date on which enhanced compensation is ordered. On that basis, the entire amount could not be brought to tax in a single assessment year merely because the enhancement was granted by the civil court during that year.

Conclusion: The question was answered in the negative and in favour of the assessee; the entire interest was not assessable in assessment year 1970-71.

Final Conclusion: Interest on enhanced compensation had to be apportioned on an accrual basis from year to year, and not taxed wholly in the year of the enhancement order.

Ratio Decidendi: Interest on enhanced compensation accrues year after year from the date of delivery of possession till the date of the court order, and is not deemed to accrue solely on the date of enhancement.

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