In Brief
The Supreme Court held that assessees who receive enhanced compensation and interest under an interim court order in pending land acquisition appeals must pay income tax in the year of receipt. Under section 45(5) of the Income Tax Act, 1961, such enhanced compensation constitutes deemed income taxable on a receipt basis, regardless of whether the award is subject to ongoing appeals. The Court endorsed the principle that subsequent adjustments may be made under section 155(16) if amounts are later reduced. The appeals by the tax department were allowed and the High Court's order was set aside.
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