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Section 5 of the Income-tax Act, 1961 - Income - Accrual of - Assessment year 1999-2000 - Whether interest on enhanced compensation is taxable when issue relating to it attains finality as same would accrue to assessee at that time only - Held, yes FACTS The assessee had received enhanced compensation and interest on it during the year under consideration. In his return of income, he showed interest income on accrual basis from year to year. The Assessing Officer held that the income from interest received by the assessee had to be assessed in the year of its receipt. On appeal, the Commissioner (Appeals) upheld the order of the Assessing Officer. On second appeal, the Tribunal held that since the issue relating to enhanced compensation was pending in dispute before the High Court, interest on enhanced compensation would be taxable when issue relating to it would attain finality as the same would accrue to the assessee at that time only. On revenue's appeal : HELD The point raised by the revenue was covered by the of the High Court in IT Appeal No. 490 of 2007, decided on 26-3-2008 wherein it had been held that the interest on enhanced compensation would not accrue till the issue of enhanced compensation was finally decided and thereafter, on attaining the finality of its determination by the Court, the interest accrued to the assessee had to be spread over on an annual basis right from the date of delivery of possession till the date of the order of the Court on the time basis. [Para 7] Consequently, in the light of the said authoritative pronouncement, no fault could be found with the view taken by the Tribunal. Thus, no question of law, much less substantial question of law, survived for consideration of the High Court. Accordingly, the appeals were to be dismissed. [Para 8] CASE REVIEW Decision of Punjab and Haryana High Court in IT Appeal No. 490 of 2007, decided on 26-3-2008 followed. [Para 8] CASES REFERRED TO Dy. CIT v. Padam Parkash (HUF) [2006] 10 SOT 1 (Delhi) [Para 4] and Smt. Rama Bai v. CIT [1990] 181 ITR 400 /[1991] 54 Taxman 496 (SC) [Para 6]. Decision of Punjab and Haryana High Court in IT Appeal No. 490 of 2007, decided on 26-3-2008 [Para 8].…

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