Interest on retained property consideration under Chapter XXC could not be withheld by the authority and had to be released to the owners.

Where consideration money under Chapter XXC is retained by the appropriate authority and invested in fixed deposits, Section 269UG(4) requires the authority to preserve the transferor's benefit in the proceeds, including accrued interest. The principal amount continued to belong to the petitioners, and interest earned while the funds were retained could not be appropriated by the authority merely because no express court direction for interest had been obtained earlier. The petitioners were therefore entitled to release of the interest accrued on the deposited amounts.

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Issues: Whether the petitioners were entitled to interest on the amounts deposited with the appropriate authority under Chapter XXC of the Income-tax Act, 1961 and whether refusal to release such interest was justified.

Analysis: The statutory scheme required the consideration amount payable on purchase of the immovable property to be tendered within the prescribed period. Where the amount was retained by the appropriate authority and invested in fixed deposits, Section 269UG(4) empowered the authority to invest the deposited consideration and direct the interest or other proceeds to be paid in a manner giving the interested parties the same benefits as they would have derived from the property. The principal amounts belonged to the petitioners, and interest accrued on those amounts while retained by the authority. Refusal to release the interest merely because no court direction had been obtained at the time of withdrawal of the earlier writ petitions was held to be unjustified.

Conclusion: The petitioners were entitled to the interest accrued on the deposited amounts, and the appropriate authority was bound to release the interest to them.

Ratio Decidendi: Where consideration money belonging to a transferor is retained and invested by the appropriate authority under Chapter XXC, the authority must apply Section 269UG(4) fairly and cannot appropriate the accrued interest to itself merely because no express court direction for payment of interest was made.

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