Accrual of interest on enhanced compensation follows vested right to receive it, not later quantification of the award.

Interest on enhanced compensation accrues when the assessee acquires a vested right to receive it, not merely when the amount is later quantified. In land acquisition matters, where possession is taken without immediate payment, the obligation to pay compensation and related interest arises from the date of dispossession. On the facts stated, the 1961 award only quantified liabilities that had already arisen from the 1945-46 acquisition, so accrual was not deferred to assessment year 1962-63. Only the amount actually accruing in that year was taxable, and the balance was correctly deleted.

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Issues: Whether the interest awarded on enhanced compensation for acquired land accrued in the assessment year 1962-63 or in the earlier years when possession of the land was taken.

Analysis: Income is taxable in the year in which it accrues, and accrual depends on the assessee acquiring a vested right to receive the amount. Under the land acquisition framework, where possession is taken without payment of compensation, interest follows the obligation to pay compensation from the date of possession. In the special facts, the later award of 1961 merely quantified the compensation and interest that had already arisen from the original acquisition and dispossession in 1945 and 1946. The later quantification did not postpone accrual to 1962-63, because the right to receive interest had already come into existence in the earlier years.

Conclusion: The interest did not accrue wholly in assessment year 1962-63, and only the amount that actually accrued in that year was taxable; the deletion of the balance was correct and the reference was answered against the Revenue.

Ratio Decidendi: Income by way of interest accrues when the assessee acquires a vested right to receive it, and later quantification of the amount does not defer accrual to the year of quantification where the underlying liability had already arisen in earlier years.

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