TMI Blog2012 (4) TMI 238X X X X Extracts X X X X X X X X Extracts X X X X ..... Johari for the Respondent. ORDER R.K. Gupta, Judicial Member - This is an appeal by assessee against the order of ld. CIT(A) relating to assessment year 2006-07. 2. The assessee is objecting in confirming the action of the AO in taxing the amount of Rs. 73,25,583/- as interest income. 3. The above amount was received by assessee by way of order of MACT Court who awarded the payment on account of interest. The Insurance Company filed a suit against the order before the Hon'ble Rajasthan High Court who has stayed the order of MACT. However, it has directed to pay the interest amount by passing an interim order. The AO has not accepted the contention that this is not an income under the charging section of I.T. Act and even otherwise the amount received by assessee is under dispute. Therefore, it is not liable to tax, accordingly rejected the claim of the assessee. 4. The assessee filed appeal before ld. CIT(A) and all the facts and submissions were filed in writing which has been reproduced in the order of ld. CIT(A) at pages 2 to 10. It will be useful to reproduce the same in this order as under :- "( a ) Mr. Ambrish Pareek, husband of the appellant met with ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... fore the Hon'ble High Court. The amount allowed is only by an ad-interim order dated 6/8/2004. It has not accrued and arisen, but received as per the order of the court and is subject to the final order. May be reduced and required to be refunded. However, the learned. Assessing Officer by impugned assessment order dated 17/12/2008 held that such interest has accrued, has been received and, therefore, is liable to tax under Section 4 of the Income Tax Act, 1961 during the year under appeal. ( e ) The order of the Hon'ble Court dated 6/5/2005, on the basis whereof interest is being deposited by the Insurance Company in the bank accounts has been reproduced by the learned Assessing Officer on page 2 of the impugned order. Admittedly the appeal is still pending before the Hon'ble High Court. The claim and quantum of compensation, allowing of interest, the rate of interest are in flux and are not yet final. The Insurance Company has disputed the right to claim the compensation. The appellant in its application dated 11th September 2008 in para 3.2 has reproduced the claim and plea of the Insurance company: "That the learned Tribunal has not discussed and considered the sharp con ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... T v. Karanbir Singh [2008] 303 ITR 231 (P H). ( iii ) CIT v. Syed Khadruddin Ali Khan [1983] 144 ITR 266 (AP). ( iv ) Paragon Constructions (I) Pvt. Ltd. v. CIT [2005] 274 ITR 413(Del.) ( v) CIT v. Laxman Dass [2000] 246 ITR 622 (Allahabad). ( vi ) CIT v. Abdul Mannan Shah Mohammed [2001) 248 ITR 614 (Bom.). ( vii ) DIT v. Goyal Charitable Trust [1995] 215 ITR 672 (Del.). ( viii ) CIT v. Sarvatra Roadrunners Pvt. Ltd. [2008] 301 ITR 443 (Delhi). In the said case the Hon'ble High Court followed and explained the case of Hindustan Housing ( supra ). It also referred to the decision of AP High Court in Khan Bahadur Ahmed Alladin and Sons v. CIT [1969] 74 ITR 651 and other which were approved by the Hon'ble Supreme Court in the case of Hindustan Housing ( supra ). ( ix ) Chief CIT v. Smt. Shantavva [2004] 267 ITR 67 (Kar.). ( x ) CIT v. ABV Gowda [1986] 157 ITR 697 "A mere claim to income without an enforceable right thereto cannot, therefore, be regarded as an accrued income for the purpose of the Income-tax Act." ( xi ) CIT v. Laxman Dass [2000] 246-ITR-622 held, dismissing the application for reference, that ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ions of the Hon'ble Supreme Court in the under noted cases where original claim allowed by the MACT and the lower Courts is reduced/reversed by the Hon'ble Supreme Court on appeal by the Insurance Company. U.P State Road Transport Corporation v. Krishna Bala and others [2006] ACJ 2114 (SC) New Indian Assurance Co. Ltd. v. Kalpana and others [2007] ACJ 825 (SC) ( i ) The ld. AO in his Order at Pg. 3 observed as under: "It is further directed that the interest was to be paid continuously quarterly. This shows that the right of the assessee to the claim of interest had attained finality." The ld. AO has wrongly observed that the right of the assessee to the claim of interest had attained finality merely because there was a direction of paying interest to the assessee on quarterly basis. In this regard it is submitted that the amount of interest, having been directed by the Hon'ble Jurisdictional High Court, to be paid to the appellant is subject to the final decision of the appeal and the amount so received is liable to be refunded if the decision of the appeal is against the present appellant. ( j ) The impugned interest is discretionary and not statutory. The Hon'ble ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ) (2007) 1 Supreme Court Cases 508 Tejinder Singh Gujral v. Inderjit Singh Ors. ( iii ) 2008 A.C.J. 2041 SC (2044 Para 11) Dharampal others v. U.P. State Road Transport Corporation. ( k ) In similar circumstances, the Punjab Haryana High Court has held that such discretionary interest is not in the nature of income. We refer to the following decisions:- ( i ) CIT v. B. Rai [2003] 264 ITR 617 (P H) ( ii ) CIT v. Chiranjit Jawa [2004] 270 ITR 173 (P H) ( iii ) Oriental Insurance Company Ltd. v. Income Tax Officer ITAT, Delhi 'D' bench (2005) 96 TTJ (Del) 589 "What the assessee company pays to the claimant, may be a compensation and interest thereon but legally it is the decretal amount which the assessee-company is liable to pay after adjudication of the claim of the claimants through the filing of the proper suit in the MACT Court. The definition of the interest under s. 2(28A) provides interest payable in any manner in respect of any moneys borrowed or debt incurred. The inclusive definition provides interest on deposit, claim or other similar right or obligation. By applying the rule of interpretation, i.e., " ejusdem generis " the d ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... submit reliance of the said section is misconceived and misplaced. Once tax deduction has been made it had to be claimed while furnishing the return and in case the appellant is held not liable to tax would be entitled to its refund. ( l ) The ld. AO has observed in his order at Pg. 4 as under: "The assessee by filing TDS certificates and the return showing the interest income thereof has voluntarily shown the interest income and claimed credit for TDS." Admittedly, note was given along with the return and as integral part of the return. Non-furnishing of any revised return cannot be adverse to the claim of the appellant. We submit that the Bombay High Court in Nirmala L. Mehta v. A Balasubramaniam, CIT [2004] 269-ITR-1 (Bom.) held that merely because the assessee offered for tax that would not take away right of the assessee to contend that the amount was not chargeable and assessable to tax under the Income-tax Act. We submit there cannot be any estoppels against the statue and Article 265 of the Constitution of India in unmistakable terms provides that no tax shall be levied or collected except by authority of law. Acquiescence cannot take away from the appellant the r ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... also paid self assessment tax of Rs. 16,37,100/- on the interest income of Rs. 73,25,583/- Before the AO, it was submitted that since interest payment was ad-interim and the matter was not yet final therefore the interest income was not liable to tax subject to final order of High Court. There was an apprehension that it might be reduced and could be refunded. It was further submitted that interest was also part of motor accident compensation. The AO however was not satisfied with the explanation of the appellant. He held that though the insurance company was in appeal but the assessee had also preferred to file an appeal demanding more compensation. The AO held that as per provisions of section 4 of Income tax Act, 1961 income received or accruing during the relevant previous year is subject to tax. The mere right and claim to receive is not subject to tax. In the case of the assessee, the amount has been received and tax was deducted at source. What the assessee had received was a sum of money and not merely a right/claim to receive the same. The AO also held that the assessee was free to revise her return of income but the same had not been done till the date of finalization of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ampbell's Act in England. This modification was necessary because in common law the death of a person did not provide a cause of action for a suit for compensation to his dependants. The Fatal Accident Act, 1855 was, therefore, enacted with a view to provide compensation to families for loss occasioned by the death of a person caused by actionable wrong of others. This Act, therefore, enacts an exception to the rule ' actio Personalis moritum cum persona '. Section 1A of this Act makes a clear departure from the general rule that a right of suit in connection with a personal cause of action dies with the death of such person. It is now because of this Act that the cause of action arises in favour of the dependents of the deceased killed in a fatal accident. One species of such fatal accident is those caused by motor vehicles which are dealt with by section 110A to 110F of the Motor Vehicles Act, 1939. It is no doubt true that the substantive law on the subject is contained in the Fatal Accident Act, 1855 and the provisions of the Motor Vehicle Act, 1939 appear to be merely providing a forum and a procedure for the claim for the compensation. But, in fact, provisions of section 110A ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d of the Motor Accident Claims Tribunal. In its said decision, the Gujarat High Court relied on the decision of the Hon'ble Apex Court arising under the Land Acquisition Act, 1894 in Rama Bai v. Commissioner of Income tax , AP, (1990) 181 ITR 400, wherein the Apex Court has held that interest on enhanced compensation for land compulsorily acquired under the Land Acquisition Act, 1894, awarded by the Court on a reference under section 18 of the Act or on further appeal, has to be taken to have accrued not on the date of the order of the Court granting enhanced compensation but as having accrued year after year from the date of delivery of possession of the land till the date of such order and that such interest cannot be assessed to income tax in only lump sum in the year in which the order is made. The Gujarat High Court applied the same principle to interest on compensation awarded by the Motor Accidents Claims Tribunal and held: "The interest on the compensation awarded by the Tribunal or enhanced compensation awarded by the appellate court cannot be taken to have accrued on the date of the award of Tribunal granting compensation or from the date of the award of the appellat ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ase, the assessee was a District and Sessions Judge, for the assessment year under consideration. He had claimed higher pay scale than what was being allowed to him. The claim of the assessee for higher pay scale was allowed. The court while passing order for grant of higher pay scale also ordered payment of interest at the rate of 12 percent per annum from the date of accrual of the amount till the date of actual payment. Therefore the main issue before the Honourable High Court was difference between statutory interest and interest awarded by court in its discretion on arrears of salary. It was thus held that awarding of interest and rate of interest was in discretion of court and hence the discretionary interest income was not assessable. In the later case, the earlier decision of B Rai was simply followed. These decisions are not applicable to the facts of the present case. The counsel of the assessee has also relied on the decision of Honourable Delhi Tribunal in the case of Oriental Insurance Company Ltd. (96 TTJ 589). However this decision was also considered by the Honourable Bangalore Bench in the case of National Insurance Co. Ltd v. ITO (2007-TIOL-306-ITAT-Bang) and ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n that context, Hon'ble court has rendered the aforesaid finding after considering the provision of clause ix, which was inserted w.e.f. 1.6.2003. Hon'ble High Court has held that liability of the assessee company to deduct tax arises from the provision of section 194A(1) of the Act. By inserting clause ix, a relaxation was made for non-deduction of tax, if the sum does not exceed Rs. 50,000/- The aforesaid decision is binding on the Tribunal, Bangalore Bench. Therefore, by following the aforesaid decision, we hold that the Insurance Company was liable to deduct tax from the interest awarded by MACT even before 1.6.2003. This point is decided against the assessee'. Further there is a distinction between compensation on acquisition of land and interest payable on such compensation. The distinction is apparent from section 34 of Land Acquisition Act itself. The interest is payable for the period beginning from the date of the possession on acquisition to the date of payment of compensation. The interest is not an integral part of the compensation but it is distinct and separate. The interest on compensation awarded under the Land Acquisition Act runs from day to day, accruing from ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ct. In order to overcome above difficulties and to improve the situation, the Legislature amended section 45 by introducing sub section (5) to section 45 w.e.f. 1.4.1988. Now compensation payable is brought to tax at two stages: one under sub section (1) i.e. in the year in which transfer takes place. This gain is computed with reference to the compensation awarded by the Acquisition Officer. If any capital gain arises or accrues with reference to compensation awarded it, is liable to tax under sub-section (1) of section 45. ii) Secondly enhanced compensation is separately and independently assessed. The decision of Supreme Court in the case of Hindustan Housing and Land Development Trust Ltd. ( supra ) was applicable in the case of assessment of capital gain on accrual basis under section 45(1) of the Income-tax Act. The said section was not applicable where enhanced compensation was being assessed under section 45(5) on receipt basis. The argument that no right had accrued to the assessee to receive compensation under section 45(5) as right to receive compensation was subject matter of dispute before higher court is liable to be rejected. The provisions of section 45(5) of th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... clause no doubt was inserted by Finance Act, 2003 w.e.f. 1.4.2004, but it has to be taken to be declaratory in character. In a given case where enhanced compensation is assessed on receipt basis, and amount of compensation is subsequently reduced, then Revenue will have to rectify and take reduced amount in place of the amount originally taken in the assessment. Thus the legislature has dealt with a situation of compensation getting reduced in appeal or other proceedings. The above provisions of law cannot be ignored. Therefore, with utmost respect I am unable to follow the decisions relied on by the appellant. There is no way to read in clear language of statute that receipt, if conditional or allowed as per interim order of High Court is no receipt of compensation and would not be taxed in the year of the receipt. If the arguments of counsel of the appellant are adopted then it would tantamount to adopting a narrow and pedantic construction and reduce legislation to futility. It will not be out of place to state that clause (c) of aforementioned sub-section would be redundant if such arguments are accepted. In fact all the clauses would be redundant if capital gain is to be broug ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... is construed to be a revenue receipt, necessarily, unless there is an exemption under the appropriate provisions of the Act, the revenue receipt is exigible to tax. The answer to the question posed by the assessee can be traced in the decision rendered by Honourable Supreme Court in the case of K.S. Krishna Rao v. CIT (181 ITR 408) wherein it was held that where compensation awarded under the Land Acquisition Act is enhanced by the order of the court on a reference under section 18 of that Act or on further appeals, then in such cases interest on enhanced compensation cannot be taxed all in a lump sum as having accrued on the date on which the court passes the order for enhanced compensation: the interest has to be spread over on an annual basis right from the date of delivery of possession till the date of the order of the court on a time basis. Therefore the plea of the assessee that she is liable to offer interest income only when the final order is received is not tenable. The crucial words in the main provision of section 194A(3) are "at the time of the credit of such income to the account of the payee or at the time of payment thereof in cash or by the issue of a cheque o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ity to deduct tax on such interest payments was all along there as there was no specific exemption under section 194A(3) upto 30.5.2003 and only the threshold limit for effecting TDS was fixed at Rs. 50,000 from 1.6.2003. By virtue of Finance Act, 2003 the said section was amended to exclude payments below Rs. 50,000 w.e.f. 1.6.2003. There would be grave error in holding that the award granted by MACT is a decretal amount not covered under the provisions of section 2(28A) of the Act. Therefore, it is clear that such interest awarded under Motor Vehicles Act is income in the hands of the recipient. The Hon'ble Karnataka High Court in the case of New India Assurance Co. Ltd. (275 ITR 227) has held that liability of the assessee company to deduct tax arises from the provision of section 194A(1) of the Act. By inserting clause (ix), a relaxation was made for non-deduction of tax, if the sum did not exceed Rs. 50,000. Even prior to 1.6.2003, the insurance company was liable to deduct TDS on such interest component. 9. In the fifth ground of appeal, the appellant has challenged the charging of interest U/s 234C. However the charging of interest is mandatory in view of decision of juris ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... what appears to income must reach the assessee's pocket and there should not be any possibility of its deflaction from this destination. Income means real income and not fictional income. Mere receiving any sum cannot make the said receipt as income unless all ingredients of income are embedded in it. An income is receipt or a right to receipt which is irreversible and there is no possibility of the said amount being retrieved by the payer. 3. In the present set of facts, the receipt at best, from Revenues point of view, can be termed as contingent income and not an income. One has to distinguish between a contingent income and income. A contingent income is not income. Until the contingency has happened, it cannot be postulated that income has accrued or has arisen to the assessee. In Franklin v. IRC (15 TC 464), the partnership deed provided that any partner could bequeath his share to any nominee of his choice and that after his death (that is, of the partner), his nominee would become a partner only when he was accepted as such by the surviving partners. One of the partners died in 1918, nominating his son, but the surviving partners did not consent to his admission. Th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... no negligence has been alleged on the part of Insured Tata Sumo. She changed her statement by submitting an affidavit given after more than one month before the police stating therein that the accident occurred only due to negligence to insured Tata Sumo and the driver of the Tata Sumo was negligent. In the present order learned tribunal has not considered the effect of such contradiction saying that charge sheet has been submitted against the Tata Sumo driver and it was his duty to avoid the accident. The changed version Smt. Sharda Pareek can not be made applicable to the four way or super Express highways like NH-8 between Delhi to Jaipur, where vehicle goes in the same direction and there are no possibilities of head on collusion. As such it was the duty of the driver of the vehicle not to apply brakes suddenly or take any sharp turn because the vehicles coming back from the back side never except on such highway that the vehicle going ahead will suddenly stop for will create any hurdle."(PB Page No.26 to 27) 4.2. On going through the said plea, it is apparent and patent that the decision of the Hon'ble High Court may be in favour of or against the Insurance Company. It is ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ived by the assessee by way of interest in respect of additional compensation under the Land Acquisition Act, 1894, were not taxable in view of the finding of the Tribunal that the grant of additional compensation and interest thereon had not become final due to appeals preferred by the Government to the High Court. 4.3. The ld. CIT(A) has observed that all these case laws have become redundant because they are dealing with compulsory acquisition of assets and subsequently section 45(5) has been introduced with effect from 1st April, 1988. It is most humbly submitted that the above case laws provide the guidelines for deciding any receipt to be income or not. In all the above cases, the Hon'ble courts have held that in case of dispute continuing the receipt cannot be termed as income or there can be no accrual of right to receive income. This proposition still holds good. It is a different matter that to over come the effect of these judicial pronouncements on computation of capital gain on compulsory acquisition of assets, the law has been amended. However, it makes it further clear that unless the law is amended in respect of interest received on undecided compensation the sai ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ting Standard, the income is not allowed to be recognized in the financial statements if any uncertainty remains in respect of ultimate collection or the uncertainty persists about the amount. In the instant case both uncertainties i.e. whether the said amount will be collected finally or not and also whether exactly the same amount or something less will be collected are persisting. In this view of the matter based on normally accepted accounting practices, this particular receipt cannot be recognized as income. The ld. CIT(A) agrees at page 16 last 3 lines, that the quantification of interest was interlinked with the total compensation to be determined. Thus the quantification was not final at this stage. 5. Discretionary Interest is not in the nature of interest:- 5.1. In similar circumstances, the Punjab Haryana High Court has held that such discretionary interest is not in the nature of income. We refer to the following decisions: - ( i ) CIT v. B. Rai [2003] 264 ITR 617 (P H) ( ii ) CIT v. Chiranjit Jawa [2004] 270 ITR 173 (P H) ( iii ) Oriental Insurance Company Ltd. v. Income Tax Officer ITAT, Delhi 'D' bench (2005) 96 TTJ (Del) 589 "Wh ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ) Ors. v. Mahendra Masin Ors. [2006] R.A.R. 264 (Raj.) (PB Page No. 46-48) "Henceforth, all the Insurance Companies are restricted from deducting Income Tax at source on the amount of compensation payable to the claimant under the Motor Vehicles Act, 1988, including the interest. The copy of this order be sent to the General Manager, General Insurance Company, Jaipur for circulation thereof to all the Insurance Companies in the business of motor vehicles insurance. "5.2. Grant of Interest is discretionary hence not liable to tax. Interest on compensation amount relating to motor accident is granted by way of compensation hence the same should not be taxed. The Hon'ble Supreme Court in the case of Tuticorin Alkali Chemicals and Fertilizers Ltd. [1997] 227 ITR 172 held as under:- It is also well - settled that interest income is always of a revenue nature unless it is received by way of damages or compensation. It is a compensation for forbearance or detention of money and that interest being awarded to a party only for being kept out of the money, which ought to have been paid to him. In this way it is part and parcel of the compensation. 6 The ld. CIT ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ld be taxed as it is available to the recipient irretrievably whereas in the present case the interest component may be required to be refunded substantially or even entirely. Section 45(5) takes care of a situation where enhanced compensation or compensation is subsequently reduced. It provides for re-computation of the assessed capital gain with reference to finally decided compensation. In the present set of facts, interest once taxed, even if refunded in the subsequent year; there is no mechanism under the Income Tax Act, 1961 whereby the tax could be refunded to the assessee. The ld. CIT(A) has dealt with this concept at para 7, page 19 and has failed to give answer to the following two mute questions:- ( a ) What will happen if the so-called interest is required to be refunded? ( b ) Whether the tax which the Revenue is presently collecting treating this as income be refunded to the assessee by the Revenue on account of such refund of the so-called interest by the assessee to the Insurance Company? 7. The ld. CIT(A) has misplaced his reliance on the following judicial pronouncements which are distinguished on facts and on law as under:- 7.1. ( i ) Sm ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... decision of the Hon'ble Supreme Court relied by ld. CIT(A) is not applicable on the specific set of facts of the present case. 7.4 Morvi Industries Ltd. v. CIT (82 ITR 835) (SC) In the above case, before the Hon'ble Supreme Court the issue involved was whether the relinquish Commission can escape liability to tax once it has accrued in favour of assessee. The Hon'ble Supreme Court held the subsequent relinquishment has no meaning and income has accrued which must be taxed. Whereas in the present case, nothing has accrued in the favour of assessee appellant because the payer is disputing its liability to pay in the High Court. Therefore the facts are totally different and hence the above Supreme Court decision has no bearing on the case under appeal. 7.5. The CIT(A) has also relied upon the decision of the Hon'ble Supreme Court in Rama Bhai (181 ITR 400) and P. Mariappa Gounder (232 ITR 2). These decisions are totally on different issues. These decisions provide guidelines about the years of taxability once a particular receipt is decided to be income. The issue in the present appeal is whether the receipt is income or not liable to be taxed. Unless the said receipt is in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... [Civil Application No. 4923 of 2009, dated 17-12-2009] whereby it was held that TDS on interest paid is deductible under section 194A as the interest awarded to the deceased was revenue receipt in the hands of recipient. Reliance has also been placed on the decision of Bangalore Bench in case of National Insurance Co. Ltd. v. ITO [IT Appeal No. 1538 (Bang.) of 2005] whereby the decision of Delhi Bench in case of Oriental Insurance Co. Ltd. v. ITO [2005] 143 Taxman (Mag.) 12 was distinguished. The Delhi Bench has decided the issue in favour of the assessee by observing that interest received was part of compensation and not chargeable to tax as the interest is not covered by section 2(28A) of the IT Act. Various other decisions have also been cited by ld. CIT(A). No doubt, Hon'ble Madras High Court and Hon'ble Bombay High Court have held that TDS on interest is deductible as the same is revenue receipt in the hands of recipient. However, the Hon'ble Supreme Court in various cases has held that the interest is granted by way of compensation only. This was held in case of Tejinder Singh Gujral v. Inderjit Singh [2007] 1 SCC 508. Similarly in case of Abati Bezbaruah v. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... pheld, then of course, interest is also to be upheld. However, the rate may be less or more. If the award granted by MACT is annulled or reduced, then in that case interest on that amount has to be annulled or reduced. There are so many cases also where interest granted by MACT or High Court was reduced by Hon'ble Supreme Court. We will discuss some of the cases in later paras. If the amount is reduced or annulled, then there is no provision under the IT Act for refund of tax paid by the assessee for a particular year. In that situation the assessee will be in a adverse position and no court has held in any case that any person aggrieved should be in adverse position. This is a case of death by accident and if the legal heir directed to refund the compensation along with interest then there is no remedy to these legal heirs. Therefore, in view of these facts and circumstances, we are of the considered view that interest so awarded is liable to be assessed in the year in which it reached its finality. 10.2 In case of Dharampal ( supra ), the interest under section 171 of Motor Vehicle Act granted by MACT @ 6% per annum from the date of application till the date of payment. Hig ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... upon the facts and circumstances of each case. In our considered opinion, while granting interest on the compensation amount awarded, the Tribunal or the Court shall award the rate of interest, which is just and reasonable on an analysis of the facts and circumstances obtaining in the case." From the above case, it has been clearly established and proved that the rate of interest awarded by the MACT is not final. The Insurance Company has filed appeal before Hon'ble Jurisdictional High Court and the appeal has been admitted and it may be possible that order of MACT may be approved or disapproved. But the order of MACT is not final. Therefore, in these circumstances and in view of various decisions, we are of the considered view that whether the interest awarded by MACT is revenue or compensation but it cannot be taxed in the year under consideration as the same has not reached its finality. Accordingly, we hold that the amount of interest awarded in the year under consideration or received by the legal heirs is not assessable in the year under consideration as the same will be considered in the year when the compensation plus interest awarded by MACT reached its finality. We orde ..... X X X X Extracts X X X X X X X X Extracts X X X X
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