Accrual of income requires an enforceable right to receive; disputed enhanced compensation was not taxable until final determination.

Enhanced compensation for requisitioned and acquired land does not accrue as income until the assessee's right to receive it becomes vested and enforceable. Although an award had increased the compensation, the State's appeal kept the claim in real dispute, and the assessee's receipt of part of the amount was subject to refund security. Because the liability remained unsettled and the final amount depended on the appellate outcome, the enhanced sum was not taxable on accrual in the relevant previous year.

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Issues: Whether the enhanced compensation awarded for requisitioned and acquired land had accrued as income to the assessee during the previous year relevant to the assessment year 1956-57.

Analysis: Income accrues only when a right to receive it becomes vested in the assessee and there is an enforceable obligation to pay an ascertained amount. Here, although an award enhancing compensation had been made, the entire claim remained under challenge in appeal by the State Government, and the assessee's receipt of part of the amount was subject to security for refund. The right to the enhanced amount was therefore still in flux and depended on the final outcome of the appeal. The situation was distinct from cases where liability is admitted and only quantification remains.

Conclusion: The enhanced compensation did not accrue as income to the assessee during the relevant previous year, and the question was answered in favour of the assessee.

Final Conclusion: The appeal failed because the disputed enhanced compensation was not taxable in the assessment year in question on the footing of accrual.

Ratio Decidendi: Where the very right to receive compensation is under real and substantial dispute and remains subject to appellate challenge, no income accrues until the claim is finally determined and becomes enforceable.

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