Home Case Index All Cases Income Tax Income Tax + HC Income Tax - 2020 (3) TMI HC This
Forgot password New User/ Regiser ⇒ Register to get Live Demo
2020 (3) TMI 1415 - HC - Income TaxTDS u/s 194A - Motor Accidents Claims - interest accrued on the amount of compensation without deduction of Tax Deduction at Source (TDS) - HELD THAT:- In the present case, while passing the award the MACT has already held that the claimants are entitled for total compensation along with interest @ 7.5% per annum from 23.6.2017 till its the payment. Out of the aforesaid the amount, a further direction has been given that claimant No.1/respondent No.1 shall be entitled to receive Rs.4,84,000/- in cash Rs.3,00,000/- be paid in cash to each of three sons of the deceased and Rs.3,00,000/- - 3,00,000/- be further deposited in the form of FDR in the nationalised bank in which interest shall be paid to respondent No.1 periodically. Judgment of the MACT has attained finality as neither the claimants nor the Insurance Co. has filed any appeal before this High Court . The Insurance Co. has already been directed by learned Motor Accident Claims Tribunal to examine whether the interest payable to respondent No.1 was exceeding Rs.50,000/-, then only the interest is liable to be deducted. Hence, in the present case, the issue in regards to the deduction of TDS on the interest components payable to respondent No.1 is not liable to be considered again. This Court in the aforesaid three cases i.e. Ramlal [2010 (11) TMI 1118 - MADHYA PRADESH HIGH COURT]; Smt. Swaroopi Bai [2019 (6) TMI 1669 - MADHYA PRADESH HIGH COURT]; and Draupadibai [2010 (9) TMI 738 - MADHYA PRADESH HIGH COURT] has consistently held that the tax is payable on the interest accrued on the the amount of compensation under Motor Vehicle Act with a rider that the interest should not be more than Rs.50,000/- per claimant per financial year. After the aforesaid award, the Insurance Co. has calculated the interest payable on entire the amount of compensation and deducted the TDS @ 20%. At the most, the Insurance Co. can file the details of calculation of the the amount of interest, payable to each claimants and explain to the MACT that the same is exceeding Rs.50,000/- per month and the deduction of TDS was justified. If such details are filed, then the direction given in the case of Ramlal (supra) shall apply and it would be the discretion of claimants to claim a refund from the Income Tax Department or not.
|