Enhanced land acquisition compensation accrues only when it becomes enforceable by court award, not on the original award date.

Compensation arising from compulsory acquisition is a single and indivisible right to receive market value on the date of acquisition, and later judicial quantification does not create a separate right to extra compensation. However, for income-tax purposes, enhanced compensation accrues only when the civil court award makes the amount enforceable and payable; it does not accrue in the previous year of the original compensation award merely because it relates to the same acquisition transaction. The timing issue was therefore resolved in favour of the assessee, while the single-right principle was affirmed against the assessee.

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Issues: (i) Whether the right to receive compensation on acquisition of land is a single and indivisible right; (ii) Whether enhanced compensation awarded by the civil court accrues or is deemed to accrue in the previous year in which the original compensation was awarded.

Issue (i): Whether the right to receive compensation on acquisition of land is a single and indivisible right.

Analysis: The right arising on compulsory acquisition is the right to receive compensation for the land at its market value on the date of acquisition. That right is not split into two separate rights, one for original compensation and another for extra compensation. The later judicial determination merely quantifies the same underlying right.

Conclusion: The issue is answered in the affirmative and against the assessee.

Issue (ii): Whether enhanced compensation awarded by the civil court accrues or is deemed to accrue in the previous year in which the original compensation was awarded.

Analysis: Income accrues when the assessee acquires an enforceable right to receive an ascertained amount. Until the civil court allows the enhanced claim, the additional amount is uncertain and not payable or enforceable. The assessment cannot be carried back to the earlier year merely because it stems from the same acquisition transaction.

Conclusion: The enhanced compensation accrues only when it becomes payable on the court's award, and not in the earlier previous year; this issue is answered in the affirmative and in favour of the assessee.

Final Conclusion: The reference resolves the character of acquisition compensation as one right, but holds that the enhanced amount is taxable only when it becomes legally payable, thereby giving the assessee relief on the timing issue.

Ratio Decidendi: Compensation for acquired land is a single right, but the enhanced portion accrues for income-tax purposes only when it becomes enforceable by a judicial award and not on the date of the original acquisition award.

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