Interest on delayed payment of money was taxable income, not damages for wrongful detention of property.

A receipt arising from delayed payment of money was treated as interest on the use and detention of the principal, not as damages for wrongful detention of property. The court distinguished authorities dealing with compensation for wrongful detention and held that those principles did not apply where the amount was fixed as interest on an unpaid sum. On that basis, the receipt was assessable as income and not excluded merely because it was described as interest payable on delayed payment.

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Issues: Whether the sum of Rs. 21,153 received on cashing the hundi was damages for wrongful detention of money or interest, and if it was interest, whether it was assessable as income.

Analysis: The amount was paid pursuant to a later determination fixing interest on the principal sum that had remained unpaid for years. The Court held that the hundi itself did not amount to payment; the money was received only when the hundi was cashed. On the nature of the receipt, the Court distinguished cases where a sum is awarded as damages for wrongful detention of property or money, and held that those authorities did not apply. The amount represented interest attributable to the use and detention of the money, and not damages. A receipt answering that description was not outside the charging provisions merely because it was described as interest arising from the delayed payment of the principal.

Conclusion: The amount of Rs. 21,153 was held to be interest and not damages, and it was assessable as income.

Final Conclusion: The reference was answered in favour of the Revenue, and the Tribunal's view that the receipt was not assessable was rejected.

Ratio Decidendi: Where an amount awarded for delayed payment of money represents interest on the use of the money rather than compensation for wrongful detention of property, it constitutes taxable income.

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