CHANDROJI RAO vs COMMISSIONER OF INCOME-TAX, M.P. NAGPUR

The Supreme Court held that under Section 8 of the Madhya Bharat Abolition of Jagir Act, 1951, interest on compensation payable to a Jagirdar is not a part of the capital receipt but rather a separate revenue receipt. The Court clarified that the legislature's clear language distinguishes between compensation and interest, thus affirming that interest cannot be included in the assessee's income. The High Court's decision against the appellant was upheld, confirming the Tribunal's ruling that interest is not capital but revenue.