Year-wise accrual of interest on enhanced compensation limits taxability to the relevant assessment year, not the year of final enhancement.

Interest on enhanced compensation accrues year by year from the date of dispossession or delivery of possession until the date of the order enhancing compensation, rather than in a single lump sum when the enhancement is finally determined. On that basis, only the interest attributable to the year 1975-76 was assessable in assessment year 1976-77, and the balance interest for earlier years could not be taxed wholly in that year.

---

---

Issues: Whether the entire interest payable by the State Government on enhanced compensation for the period May 6, 1961 to March 31, 1976, or only the interest relatable to the year 1975-76, was assessable as income for the assessment year 1976-77.

Analysis: The question was governed by the principle that interest on enhanced compensation accrues not in a single lump sum on the date of the court's order, but year after year from the date of delivery of possession until the date of the order granting enhanced compensation. On that basis, the interest could not be brought to tax wholly in the year in which the enhancement was finally determined.

Conclusion: Only the interest relating to the year 1975-76 was assessable in the assessment year 1976-77, and the entire interest for the earlier period was not taxable in one lump sum.

Ratio Decidendi: Interest on enhanced compensation accrues year-wise from the date of dispossession or delivery of possession until the date of the order enhancing compensation, and is not assessable as one lump sum in the year of the order.

---