Compensation amount accrues or arises when it becomes determinate and payable, not when it is merely claimed or awarded subject to an appeal.

( 1 ) IN this reference under Section 66 of the Indian Income-tax Act, 1922, the following question of law has been referred to this court:"whether, on the facts and in the circumstances of the case, the extra amount of compensation amounting to Rs. 7,24,914 was income arising or accruing to the assessee during the previous year relevant to the assessment year 1956-57?"

( 2 ) THE facts material for the purpose of this reference have been fully set out in the statement of the case and may be briefly noticed. The assessee is a limited company dealing in land. Certain plots of land measuring more or less 19. 17 acres, equivalent to about 57 bighas 19 cott. , in the village Kankulia, P. S. Tollygunge, District 24-Parganas, which belonged to the assessee were requisitioned by the Government of West Bengal by an order dated 21st June, 1967 (sic) under the provisions of Rule 75a (1) of the Defence of India Rules read with Section 19 of the Defence of India Act. Thereafter, the State Government acquired the land permanently in exercise of the powers conferred on it by Section 5 of the Requisition of Land (Continuance of Powers) Act, 1947. The notice of acquisition dated the 27th December, 1952, was published in the Calcutta Gazette dated 8th of January, 1953, and a sum of Rs. 24,97,249 was awarded as compensation by the Land Acquisition Collector to the assessee. The assessee being dissatisfied with the amount of the compensation paid to it preferred an appeal to the Court of Arbitrator, 24-Parganas, Calcutta. In that case, numbered as Land Acquisition Case No. 17 of 1955, the arbitrator gave an award in favour of the assessee on 29th July, 1955, and by his award the said arbitrator fixed the amount of the compensation at Rs. 30,10,873 for permanent acquisition of the land in place of Rs. 24,97,249 assessed by the Land Acquisition Collector. The amount of compensation for the acquisition of land was thus enhanced by the sum of Rs. 5,13,624on which interest was to run at 5% per annum from the date of acquisition, that is, January 8, 1953, till the date of payment. The arbitrator also directed that further recurring compensation at Rs. 6,272-10-4 per mensem would be paid to the assessee from the date of the requisition, that is, June 29, 1946, till the date of the acquisition, that is, January 1, 1953. Against the order of the arbitrator the State Government preferred an appeal to the High Court which was initially numbered as Appeal From Original Decree No. 159 of 1955. During the pendency of that appeal on April 25, 1956, the State Government deposited a sum of Rs. 7,36,691 which the assessee was permitted to withdraw, on furnishing the security bond on May 9, 1966, which was executed by the assessee and on the basis of which the assessee was allowed to withdraw the money deposited by the State Government The said security bond executed by the assessee came to be considered by the Tribunal and one of the clauses of the said security bond noted by the Tribunal reads as follows:"now the condition of this security bond is that if the High Court by its decision in the said appeals preferred by the Government will reduce the amount of award of this court, the excess amount received by the Hindus-than Housing and Land Development Trust Ltd. shall be duly paid back both to the Arbitrator of 24-Parganas, Calcutta, or its successor-in-office, then and in such case or if the High Court by its decision will not in any way reduce the amount of the said award, this bond shall be void and of no effect otherwise it shall remain in full force and effect. "

( 3 ) ON receipt of the amount on the basis of the aforesaid bond executed by the assessee, the assessee credited the said amount in its suspense account on that date, namely, May 9, 1956. The Income-tax Officer proceeded to assess the said amount as income of the assessee which had accrued to the assessee in the relevant year. Against the decision of the Income-tax Officer the asses