T. N. K. GOVINDARAJULU CHETTY vs COMMISSIONER OF INCOME-TAX, MADRAS

The Supreme Court held that interest received on compensation for property acquired under the Requisitioned Land (Continuance of Powers) Act, 1947 is taxable under the Income-tax Act, 1922. The Court clarified that if the obligation to pay interest arises from the claimant being kept out of their money, such interest is chargeable as income. The ruling emphasized that provisions regarding interest under Sections 28 and 34 of the Land Acquisition Act, 1894 apply, and the arbitrator's award of interest is valid as it reflects the claimant's right to it. The appeal was dismissed, affirming the High Court's decision on taxability of interest.