2009 (7) TMI 12 - SC - Income Tax

Enhanced compensation – ITAT deleted deletion of enhanced compensation and interest thereon from the total income of the assessee on the ground that the said two items, awarded by the Reference Court, was under dispute in First Appeal before the High Court – Held that the receipt of such enhanced compensation/consideration is to be taxed in the year of receipt subject to adjustment, if any, under Section 155(16) of the 1961 Act, later on. - This is the scheme of Section 45(5) and Section 155(16) of the 1961 Act - We may clarify that even before the insertion of Section 45(5)(c) and Section 155(16) the receipt of enhanced compensation under Section 45(5)(b) was taxable in the year of receipt – Decision in favor of revenue.