income tax on interest

What was the case where the court has considered and decreed the amount ?

It would be better to consult your lawyer for advise and necessary proceeding.

In the light of the facts stated, in my understanding, the interest decreed by the Court does not constitute  an earning, hence not liable for income tax.

Interest earned on arrears of salary shall attract tax as per law.

It is better to consult and engage a local prudent chartered accountant / taxation lawyer for better appreciation of facts/ documents, professional advise and necessary proceeding.