TMI Blog2016 (5) TMI 268X X X X Extracts X X X X X X X X Extracts X X X X ..... payers as they are liable to pay tax two times. The payment of compensation on account of death and injury is not a business transaction or a receipt of any charges on account of services rendered by any other party. Compensation received under the Motor Vehicles Act is either on account of loss of earning capacity on account of death or injury or on account of pain and suffering and such receipt is not by way of earning or profit. Award of compensation is on the principle of restitution to place the claimant in the same position in which he would have been had the loss of life or injury has not been suffered. Therefore, the impugned orders calling upon the insurance company to pay the TDS/deduct TDS on the interest part, are not sustain ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he orders passed by the executing court calling upon the insurance company to deduct the TDS. It is in these circumstances, the aforementioned revision petitions have been filed. 4. I have heard learned counsel for the parties and appraised the paper books. 5. Paragraphs 22 and 23 of the aforementioned judgment rendered by the Himachal Pradesh Shimla High Court read thus : 22. The apex court in another case titled CIT v. Ghanshyam (HUF) reported in [2009] 315 ITR 1 (SC), laid down a similar preposition. It is apt to reproduce paragraphs 24, 25 and 27 hereunder (page 14 of 315 ITR) : '24. To sum up, interest is different from compensation. However, interest paid on the excess amount under section 28 of the 1894 Act depend ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t is paid or deposited. It is a mandatory provision. Basically section 34 provides for payment of interest for delayed payment. . . . 27. In the case of CIT v. Hindustan Housing and Land Development Ltd. [1986] 161 ITR 524 (SC) certain lands belonging to the assessee-company, which was in the business of dealing in land and which maintained its account on the mercantile system, were first requisitioned and then compulsorily acquired by the State Government. The Land Acquisition Officer awarded ₹ 24,97,249 as compensation. On appeal the arbitrator made an award at ₹ 30,10,873 with interest at 5 per cent. from the date of acquisition. Thereupon, the State preferred an appeal to the High Court. Pending the appeal, the State Go ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rities, whereby deduction of Income-tax has been ordered on the award amount and interest accrued on the deposits made under the orders of the court in motor accidents claims cases, is quashed and in case any such deduction has been made by respondents, they are directed to refund the same, with interest at the rate of 12 per cent from the date of deduction till payment, within six weeks from today. 6. There is force in the contention raised on behalf of the petitioner that the claimants are liable to pay double the tax, one on receipt of compensation which would be added in the income and the other where TDS would be deducted by the insurance company, thus, it amounts to putting an onerous liability on the taxpayers as they are liable ..... X X X X Extracts X X X X X X X X Extracts X X X X
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