TMI Blog2020 (12) TMI 483X X X X Extracts X X X X X X X X Extracts X X X X ..... ere is conflict the social welfare legislation would prevail as it would subserve larger public interest. Learned Judge has lost sight of the fact that the deceased left behind him five legal representatives when he passed away. The amount has to be distributed amongst all the five of them and it cannot be that the income tax would be payable on the total sum amount awarded. Even if we look at the order, amounts are bifurcated which goes to show that the amounts are again kept in fixed deposits. In that view of the matter, the amount of compensation will have to be divided between the persons who got money and this amount has to be spread over to the coming years. It is not one time income to them. It is compensation spread over as per the system prevailing. The amount cannot, therefore, be held to be income in one particular year, namely, 2019 when the award came to be passed even if we consider that the period during which the matter remained pending before the Tribunal, the amount has to be bifurcated amongst the legal heirs. Thereafter, the Income Tax Department will have to consider the slabs as they are applicable. Fresh decree will be drawn by the Tribunal on receipt o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... o seek instructions from it and assist the Court as the matter can be disposed of at the first hearing. The matter is covered by the judgment of the Gujarat High Court as well as Section 194A(3)(IX) of Income Tax Act. The amount of income tax slab can be deducted from the income of the deceased who was a salaried person, but adhoc ₹ 10,00,000/- and more amount by way of calculation of income tax could not have been deducted from the compensation to be awarded. The said is without any sanctity of law. Normally in the claimant's appeal, I do not pass any interim order but in this case the deduction of ₹ 1064543/- as proposed income tax could not have been ordered to be deducted. The order of deduction of ₹ 1108165/- as proposed income tax is against the mandate of law. The reason being income tax liability of concerned claimant to pay tax on interest or the compensation awarded to them shall arise if such interest or income is accrued in concerned financial year together with other income of the respective claimants in that financial year. The judgment of the Apex Court in Ramabai Versus Commissioner of Income Tax, (1990) 181 ITR page 400 will come to ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... jected by Sri P.K. Sinha, assisted by Sri Ojha making submission that amount has accrued in the year 2019 immediately after the claim petition was filed and, therefore, the deduction by the Tribunal cannot be found fault with and has requested the Court to dismiss the appeal. 11. The Tribunal, after assessing the compensation, did not assign any reason as to under what provision, it had assumed itself to be an Authority which could deduct what can be said to be tax on the entire compensation. Calculation of income tax could not have been done for the reason that income tax is on the income which accrues ever year. If the Tribunal was of the view that income of the deceased was without deduction of any tax then it could have done it from the gross salary of ₹ 27187/- rather the Tribunal deducted ₹ 2200/- which was amount of Provident Fund which he would have received on his retirement. Amount of ₹ 2000/- was further deducted on the loan which he had taken and had the Tribunal gone by the basics also as the salary of the deceased was ₹ 27,187/- per year, annual salary after deductions under the Income Tax Act would not beyond the slab of ₹ 2,50,000/- ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of them and it cannot be that the income tax would be payable on the total sum amount awarded. Even if we look at the order, amounts are bifurcated which goes to show that the amounts are again kept in fixed deposits. In that view of the matter, the amount of compensation will have to be divided between the persons who got money and this amount has to be spread over to the coming years. It is not one time income to them. It is compensation spread over as per the system prevailing. The amount cannot, therefore, be held to be income in one particular year, namely, 2019 when the award came to be passed even if we consider that the period during which the matter remained pending before the Tribunal, the amount has to be bifurcated amongst the legal heirs. Thereafter, the Income Tax Department will have to consider the slabs as they are applicable. As per decision of the Apex Court in Sarla Verma Vs. Delhi Transport Corporation, (2009) 6 SCC 121, the contribution to the family known as multiplicand multiplied by the multiplier which is for the several imponderables in life and economic factors and is based on the application of multiplier with reference to the age of the deceased which ..... X X X X Extracts X X X X X X X X Extracts X X X X
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