Interest on enhanced compensation accrues year to year and is not taxable as a lump sum on the enhancement date.

Interest on enhanced compensation under the Land Acquisition Act accrues from year to year and does not become assessable as a single lump sum on the date of the enhancement order. Where compensation is increased in reference proceedings or further appeals, the income element must be apportioned annually from the date of possession until the date of the court's order. The assessment therefore had to be modified on an annual spread basis, giving relief to the assessee.

---

---

Issues: Whether interest on enhanced compensation awarded under the Land Acquisition Act, where the enhancement is made in reference proceedings or further appeals, is taxable as a lump sum on the date of the court's order or must be spread over on an annual basis from the date of possession until the date of the order.

Analysis: The relevant question stood governed by the Court's contemporaneous decision on the same point. The governing principle was that interest on enhanced compensation does not accrue in a single sum on the date of the enhancing order. Instead, the income element accrues over time and must be apportioned year-wise from the date of delivery of possession until the date of the court's order granting enhanced compensation.

Conclusion: The interest could not be taxed in a lump sum on the date of the enhancement order and had to be spread over on an annual basis.

Final Conclusion: The assessment was required to be modified in accordance with the rule of annual spread of accrued interest on enhanced compensation, resulting in relief to the assessee.

Ratio Decidendi: Interest on enhanced compensation accrues from year to year until the court determines the enhanced amount, and it is not assessable as a single receipt on the date of the enhancement order.

---