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2018 (12) TMI 761 - HC - Income TaxTDS u/s 194A on interest awarded by the Motor Accident Claims - Held that:- Compensation awarded under Motor Vehicles Act or Employees' Compensation Act in lieu of death of a person or bodily injury suffered in a vehicular accident, is a damage and not an income and cannot be treated as taxable income. It is well settled that interest awarded by the Motor Accident Claims Tribunal on a compensation is also a part of compensation upon which income tax is not chargeable as also held by the Division Bench of this Court in Court on its own motion vs. The H.P. State Cooperative Bank Ltd. and others, [2014 (10) TMI 972 - HIMACHAL PRADESH HIGH COURT] - in view of abovesaid decision, deduction of income tax by petitioner/Insurance Company on the awarded compensation and interest accrued thereon is illegal and is contrary to the law of land. This petition is disposed of directing respondent No. 3 Income Tax Officer, Sector 2, Panchkula to refund the TDS to the petitioner/Insurance Company within ten weeks from date of receiving information thereof, which shall be supplied by petitioner/Insurance Company within two weeks from today, as per Rules applicable.
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