TMI Blog2019 (6) TMI 1669X X X X Extracts X X X X X X X X Extracts X X X X ..... he order dated 11-8-2018 passed by 14th Additional Motor Accident Claims Tribunal, Gwalior in Execution Claim Case No.189/2009, by which the Insurance Company has been directed to pay the amount of interest, which has been deducted by way of TDS. 2. The necessary facts for the disposal of the present petition in short are that the respondents No.1 and 2 had filed a claim petition under Section 166 of Motor Vehicles Act, and 14th Motor Accident Claims Tribunal by impugned award, held that the driver, owner as well as the Insurance Company, are jointly and severally liable to pay compensation with interest payable from the date of claim petition. 3. The Insurance Company calculated the interest amount and deposited the entire compensation amount as well as the interest amount after deducting TDS on interest. 4. The respondents no.1 and 2 objected to it and the Executing Claims Tribunal by impugned order has decided the objection in favour of the claimants and held that if the interest amount is spread over to the number of years from the date of filing of the claim, then in none of the financial year, the interest more than Rs.50,000/- had accrued, therefore, the Insurance C ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of certain income. (1) Notwithstanding anything to the contrary contained in Section 145, the interest received by an assessee on any compensation or on enhanced compensation, as the case may be, shall be deemed to be the income of the previous year in which it is received. (2) Any claim for escalation of price in a contract or export incentives shall be deemed to be the income of the previous year in which reasonable certainty of its realisation is achieved. (3) The income referred to in sub-clause (xviii) of clause (24) of Section 2 shall be deemed to be the income of the previous year in which it is received, if not charged to income-tax in any earlier previous year. 9. Section 194-A(3)(ix)(ix-a) of Income Tax Act would apply, for deduction of Tax at source in case if interest paid on the compensation amount awarded by the Motor Accidents Claims Tribunal, exceeds Rs.50,000/-. Section 194-A of Income Tax Act reads as under : 194-A. Interest other than Interest on Securities . (1) Any person, not being an individual or a Hindu undivided family, who is responsible for paying to a resident any income by way of interest other than income by way of Interest on ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nce Company has to be spread over in number of years from the date of filing of the claim petition. 13. Considered the submissions made by the Counsel for the respondent no.2. 14. It is well established principle of law, that the provision of exemption has to be construed strictly and in case of any ambiguity, the benefit must go to the revenue. 15. The Supreme Court in the case of Novopan India Ltd. Vs. CCE C, reported in 1994 Supp (3) SCC 606 has held as under : 16. We are, however, of the opinion that, on principle, the decision of this Court in Mangalore Chemicals - and in Union of India v. Wood Papers referred to therein - represents the correct view of law. The principle that in case of ambiguity, a taxing statute should be construed in favour of the assessee - assuming that the said principle is good and sound - does not apply to the construction of an exception or an exempting provision; they have to be construed strictly. A person invoking an exception or an exemption provision to relieve him of the tax liability must establish clearly that he is covered by the said provision. In case of doubt or ambiguity, benefit of it must go to the State. This is for the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hen it is proved by the claimants that the deceased/injured was not negligent, and the driver of the vehicle was driving the vehicle in a rash and negligent manner, and further the deceased had died in a vehicular accident, whereas in the case of compensation under the Land Acquisition Act, an owner becomes entitled to receive the compensation, immediately after his land is acquired and possession is taken. Even otherwise, the Supreme Court in the case of CIT Belgaum Urban Development Authority Vs. CIT reported in (2017) 13 SCC 759 has held as under: 9. The respondent does not dispute the payment of Rs 1,96,780 as payment of interest for belated payment of compensation in respect of land acquired and the fact that the said interest paid for belated payment of compensation is liable to income tax is not disputed. However, the question is as to whether the tax in respect of the said payment has to be deducted at source under Section 194-A of the Act? It has been clearly laid down in the decision cited by the learned counsel appearing for the appellants in Bikram Singh case that the said payment which is exigible to income tax regarding interest payable for the belated payment of c ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... at interest payable for belated payment of compensation for the land acquired is exigible to tax and the Land Acquisition Officer was justified in deducting the tax under Section 194-A of the Act for the said payment also. There is no merit in the contention of the learned counsel appearing for the respondent that the Hon ble Supreme Court has laid down in the said case that, though the Hon ble Supreme Court has held that it is a revenue receipt exigible to tax under Section 4 of the Act, Section 194-A of the Act has no application for the payment of interest applicable as it is clear that the said principle has not been laid down by the Hon ble Supreme Court in para 10 of the judgment as narrated above. What has been laid down by the Hon ble Supreme Court is that the interest payable for belated payment of compensation for the land acquired is exigible to tax and the Hon ble Supreme Court has confirmed the deduction of tax towards payment of interest under Section 194-A of the Act and has further observed, Section 194-A of the Act has no application for the purpose of this case . In view of the fact that the Land Acquisition Officer had already deducted the amount under Section 1 ..... 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