COMMISSIONER OF INCOME TAX vs UNITED PROVINCES ELECTRIC SUPPLY CO.

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 upheld the High Court's ruling that the addition of Rs.1,29,35,557/- to the income of the assessee was unjustified as the final compensation had not been determined, and thus Section 41(2) could not be applied. The appeal by the revenue was dismissed, affirming that the revenue could not assess the income until the compensation was settled.