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TDS on Liquidated/Contractual damages, Income Tax

Issue Id: - 116712
Dated: 16-9-2020
TDS on Liquidated/Contractual damages

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Dear Sir,

As per facts of our client's case, they had entered into agreement with a power company for supply of solar power. The client had assured the power co. that whatever surplus power would be generated by the plant, the client would ensure that the power co. could supply same to the Grid and earn incomes.

However, the client could not obtain necessary approvals as a result of which the power co. suffered losses. Now as per the contract, the client has to pay compensation to the power co. My question is whether TDS would be deductible on this compensation/liquidated damages?

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Showing Replies 1 to 2 of 2 Records

1 Dated: 17-9-2020
By:- Ganeshan Kalyani

In my view, TDS is not applicable.

2 Dated: 18-9-2020

There are plehthora of judgment on this matter.

Income Tax Appellate Tribunal - Kolkata

Eros Fashion Pvt Ltd., Kolkata vs Assessee on 20 November, 2015 = 2015 (11) TMI 1820 - ITAT KOLKATA


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