The Commissioner Of Income-Tax, West ... vs United Provinces Electric Supply ...

The Supreme Court addressed the interpretation of Section 41(2) of the Income Tax Act, 1961, in the context of compensation for compulsory acquisition under the Indian Electricity Act, 1910. The Court held that the addition of Rs.1,29,35,557/- to the income of the assessee was not justified as the final compensation had not been determined, and thus, the provisions of Section 41(2) could not be invoked. The Court upheld the Tribunal's decision, affirming that the assessment year 1965-66 could not include profits from assets whose compensation was still under dispute.