In Brief
The Supreme Court addressed whether assessees who received enhanced compensation and interest under an interim high court order in pending land acquisition appeals must pay income tax in that year. The Court held that under section 45(5) of the Income Tax Act, 1961, enhanced compensation qualifies as "deemed income" taxable in the year of receipt, even if the land acquisition proceedings are still pending. The decision clarified that multiple-stage compensation under the Land Acquisition Act, 1894 must be taxed as received, subject to later adjustment if the final award differs. The Court allowed the appeals and set aside contrary orders."
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