TaxTMI Login
AI Drafter - (New and Powerful) ✕
Generate professional replies, appeals, opinions to Show Cause Notices, assessment orders, audit objections, and other legal communications using TaxTMI's AI Drafter.
Just a moment...
AI Drafter - (New and Powerful) ✕ Generate professional replies, appeals, opinions to Show Cause Notices, assessment orders, audit objections, and other legal communications using TaxTMI's AI Drafter.
Press 'Enter' to add multiple search terms. Rules for Better Search
Use comma for multiple locations.
---------------- For section wise search only -----------------
Accuracy Level ~ 90%
of 
Press 'Enter' after typing page number.
of Press 'Enter' after typing page number.
No Folders have been created
Are you sure you want to delete "My most important" ?
NOTE:
of Press 'Enter' after typing page number.
of Press 'Enter' after typing page number.
All Case Laws
of Press 'Enter' after typing page number.
of Press 'Enter' after typing page number.
All Case Laws
Note
Bookmark
Share
Don't have an account? Register Here
of Press 'Enter' after typing page number.
Issues: Whether interest payable on enhanced land acquisition compensation accrued only in the year of actual payment or accrued from year to year from the date the land was taken over.
Analysis: Income is chargeable in the year in which it accrues or arises. Where the right to receive income comes into existence, accrual follows even if the exact amount is quantified later. Interest under section 34 of the Land Acquisition Act, 1894 is statutory interest payable from the date of possession until payment or deposit, and it is compensation for withholding the compensation amount. The right to such interest is a right in praesenti and accrues day by day from the date of dispossession. As the assessee was not maintaining business accounts and the receipt was not tied to any mercantile accounting problem, the taxability had to be determined according to the year-wise accrual of the interest.
Conclusion: The interest did not become taxable wholly in the assessment year 1968-69; it was taxable only in the respective previous years in which it accrued. The question was answered in favour of the assessee and against the department.
Ratio Decidendi: Statutory interest payable for delayed payment of land acquisition compensation accrues from day to day from the date possession is taken, and income tax is attracted in the year of accrual, not merely in the year of receipt or final quantification.
TaxTMI 
