Section 41(2) taxation applies only to acquisition compensation instalments actually due, not the full amount on determination.

For section 41(2) purposes, compensation for acquisition of buses was taxable only when the instalments actually became due, not in the year the full compensation was determined. The acquisition statute provided for payment by annual instalments above the prescribed limit, so determination of compensation did not make the entire amount immediately payable. In this statutory context, "money payable" was treated as distinct from "money due", and only the instalments falling due in the relevant previous year could be brought to charge. Practical difficulty in computation could not widen the charging provision, so taxation of the full compensation was unsustainable.

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Issues: Whether, for the purpose of section 41(2) of the Income-tax Act, 1961, the entire compensation arising from acquisition of the buses was chargeable in the year in which compensation was determined, or only the instalments that had actually become due in the relevant previous year.

Analysis: Section 41(2) taxes the excess on the basis of the year in which the monies payable for the asset became due. The acquisition statute provided for payment of compensation in annual instalments in cases exceeding the prescribed limit, and the instalments were not payable before their respective due dates. On that construction, the determination of compensation did not make the whole amount due at once. The expression "money payable" was treated as distinct from "money due" in the statutory context, and only the instalments falling due in the relevant year could be brought to charge. Practical difficulty in computing the profit could not justify a wider reading of the charging provision.

Conclusion: Only the instalments due on the relevant due date in the assessment year under consideration were taxable under section 41(2); the addition of the entire compensation was unsustainable and the assessee succeeded.

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