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TMI Blog2002 (10) TMI 24X X X X Extracts X X X X X X X X Extracts X X X X ..... to all the concerned parties. Nobody appeared on behalf of the claimants even after issuance of S.P.C. and repeated registered notices by this court. Shri V.P. Khare, learned Deputy Government Advocate appeared for the State. The reference court has stated the following facts for recording the opinion of this court that at the instance of the Executive Engineer, Public Works Department, Madhya Pradesh, the lands situated at Jawahar Marg, Indore, were acquired for construction of the Siyaganj over-bridge by the Collector and the Land Acquisition Officer, Indore, and in this connection Land Acquisition Case No. 116-A/82 of 1973-74 was instituted at the instance of one Parwatibai, wife of Modilal and her husband Modilal, son of Birdichand, the occupier of the abovementioned land and property in the court of the Land Acquisition Officer, Indore. An award was passed in favour of Parwatibai and Modilal to the tune of Rs. 51,801.75. Thereafter, the aforesaid persons made a request for a reference against the aforesaid award to the court of the Additional judge to the court of the District Judge, Indore. The reference was under section 18 of the Land Acquisition Act. The reference was re ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on Officer with a direction to deduct the tax and to credit it to the Income-tax Department and then to remit the rest of the amount along with the challan copy for further proceedings. The Land Acquisition Officer, Indore, vide letter dated October 14, 1991 (annexure D), replied and denied his liability to deduct the tax and directed the court to do so. Therefore, on the aforesaid facts, the court has formulated the aforesaid questions and had sought opinion of this court. I have heard Shri R.L. Jain, learned counsel appearing for the Income-tax Department of the Union of India and also Shri V.P. Khare, learned Deputy Government Advocate for the State of Madhya Pradesh. None appeared on behalf of the claimants. Shri R.L. Jain submitted that under section 194A of the Income-tax Act, 1961, tax is to be deducted by the person responsible for paying any income by way of interest and has also placed reliance on a decision in the case of Bal deep Singh v. Union of India [1993] 199 ITR 628, in which it has been held by the Punjab and Haryana High Court that the executing court is not the person responsible for paying the interest. Therefore, the executing court is not liable to deduct ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... shall apply accordingly. (***) Omitted by the Finance Act, 1992, with effect from June 1, 1992. (3) The provisions of sub-section (1) shall not apply- (i) where the amount of such income or, as the case may be, the aggregate of the amounts of such income credited or paid or likely to be credited or paid during the financial year by the person referred to in sub-section (1) to the account of, or to, the payee, does not exceed two thousand five hundred rupees: Provided that in respect of the income credited or paid in respect of- (a) time deposits with a banking company to which the Banking Regulation Act, 1949 (10 of 1949), applies (including any bank or banking institution referred to in section 51 of that Act); or (b) time deposits with a co-operative society engaged in carrying on the business of banking; (c) deposits with a public company which is formed and registered in India with the main object of carrying on the business of providing long-term finance for construction or purchase of houses in India for residential purposes and which is for the time being approved by the Central Government for the purpose of clause (viii) of sub-section (1) of section 36, the provisi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nking; (viii) to such income credited or paid by the Central Government under any provision of this Act or the Indian Income-tax Act, 1922 (11 of 1922), or the Estate Duty Act, 1953 (34 of 1953), or the Wealth-tax Act, 1957 (27 of 1957), or the Gift-tax Act, 1958 (18 of 1958), or the Super Profits Tax Act, 1963 (14 of 1963), or the Companies (Profits) Surtax Act, 1964 (7 of 1964), or the Interest-tax Act, 1974 (45 of 1974). Explanation.-For the purposes of clauses (i), (vii) and (viia), 'time deposits' means deposits (excluding recurring deposits) repayable on the expiry of fixed periods. (4) The person responsible for making the payment referred to in sub-section (1) may, at the time of making any deduction, increase or reduce the amount to be deducted under this section for the purpose of adjusting any excess or deficiency arising out of any previous deduction or failure to deduct during the financial year. (***) Omitted by the Finance Act, 1992, with effect from June 1, 1992." "204. Meaning of 'person responsible for paying'.--For the purposes of sections 192 to 194, section 194A, section 194B, section 194BB, section 194C, section 194D, section 194E, section 194EE, section ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... en into account. This section has to be read in conjunction with section 204 which furnishes the meaning of "person responsible for paying". Where land is compulsorily acquired and the money to be paid as enhanced compensation, is deposited in the execution court and interest is awarded on such compensation, the court is not the person responsible for paying any income by way of interest to the assessee. The real person responsible for paying income-tax by way of interest is the Land Acquisition Officer/Collector who had money in his possession and was responsible for making the payment of that income to the assessee. It has been clearly held by the Division Bench of the Punjab and Haryana High Court in the case of Tuhi Ram v. Land Acquisition Collector [1993] 199 ITR 490, that the income-tax is payable only on the amount of interest payable as compensation for the acquisition of any property and the income by way Of interest so received as above has to be spread over all the years for the purpose of assessment to income-tax from the time, it becomes due. Therefore, in view of the aforesaid submissions and in view of the foregoing discussions in the opinion of this court the answ ..... X X X X Extracts X X X X X X X X Extracts X X X X
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