Land acquisition interest accrues year by year from dispossession, making it taxable in the relevant years, not only on award.

Interest under section 34 of the Land Acquisition Act accrues from the date possession of the acquired land is taken and continues year by year until the amount is quantified; the later award only fixes the sum payable and does not create the liability for the first time. On that basis, such interest is taxable in the relevant assessment years from the date of dispossession, rather than only in the year the award is made. This is distinguished from interest under section 28, which arises from the court's determination of enhanced compensation and is tied to the final fixing of that enhanced amount.

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Issues: Whether interest awarded under section 34 of the Land Acquisition Act on compensation for acquired land accrued for taxation only when the award was made, or whether it accrued from year to year from the date possession was taken.

Analysis: Interest under section 34 arises from the date on which possession of the land is taken over and the obligation to pay continues thereafter until quantified. The later award only determines the amount payable and does not create the liability for the first time. This is distinct from interest under section 28, which depends upon the order of the court determining enhanced compensation and is awarded when that enhanced amount is finally fixed.

Conclusion: The interest awarded under section 34 accrued from year to year from the date of dispossession and was taxable in the relevant assessment years, not merely in the year of the award.

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