TMI Blog2019 (6) TMI 1682X X X X Extracts X X X X X X X X Extracts X X X X ..... ee is of the view, that the tax has been deducted in excess, then he can always claim refund of the same from the Income Tax Department. Accordingly, this Court is of the considered opinion that the Executing Claims Tribunal, committed material illegality by holding that the Insurance Company is not liable to deduct the TDS. - MP No. 546/2019 - - - Dated:- 24-6-2019 - Mr. G.S. Ahluwalia, J. Shri R.V. Sharma, Advocate for Petitioner. Ms. Meena Singhal, Advocate for Respondents no.1 to 5. ORDER This petition under Article 227 of the Constitution of India has been filed against the order dated 1-11-2018 passed by 6th Additional Motor Accident Claims Tribunal, Gwalior in Execution Claim Case No.107/2018, 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 to 5 had filed a claim petition under Section 166 of Motor Vehicles Act, and 6th Motor Accident Claims Tribunal by impugned award, held that the driver, owner as well as the Insurance Company are jointly and severally liable to ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... no.1 to 5 that the interest paid to the claimants is to be spread over in number of years from the date of filing of the claim and the TDS should be deducted only when the spread over interest for a particular year exceeds Rs.50,000/-. To buttress her contentions, the Counsel for the respondents no.1 to 5 has relied upon the judgment passed by a co-ordinate bench of this Court in the case of United India Insurance Co. Ltd. Vs. Ramlal and others passed on 23-11-2010 in C.R. No. 274 of 2008. 7. Considered the submissions made by the Counsel for the parties. 8. Section 145-B of Income Tax Act, reads as under : 145-B. Taxability 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) ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... would be clear that 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 and if the total interest exceeds Rs.50,000/-, then the Insurance Company has to deduct the TDS. 11. Further, a person would become entitled for the compensation amount, only after the award is passed and before that, it cannot be said that the claimant is entitled for any compensation or interest. 12. The Counsel for the respondents no.1 to 5 has relied upon the judgment passed by the co-ordinate bench of this Court in the case of Ramlal and others and submitted that the interest paid by the Insurance 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 respondents no. 1 to 5. 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... iance was placed on a judgment passed by the Supreme Court in the case of Smt. Rama Bai Vs. CIT reported in (1990) 84 CTR (SC) 164 and K.S. Krishna Rao Vs. CIT reported in (1990) 84 CTR (SC) 144. Both the above mentioned judgments have been passed in the case of award of interest in the Land Acquisition Matters. However, the cases of Land Acquisition cannot be equated with Motor Accident Claim Cases. In the cases of Land Acquisition, an owner becomes entitled for compensation from the date of taking over of possession of land whereas in the case of Motor Accident Claim Cases, a claimant becomes entitled for compensation, only after the award is passed after adjudication of his entitlement. An award under the Motor Vehicles Act can be passed only when 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 Cour ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... come on the delayed payment of the compensation determined under Section 28 or 31 of the Acquisition Act is a taxable event. Therefore, we hold that it is a revenue receipt exigible to tax under Section 4 of the Income Tax Act. Section 194-A of the Act has no application for the purpose of this case as it encompasses deduction of the income tax at the source. However, the appellants are entitled to spread over the income for the period for which payment came to be made so as to compute the income for assessing tax for the relevant accounting year. 10. It is clear from the principle laid down by the Hon ble Supreme Court as narrated in para 10 of the judgment in Bikram Singh case as cited above, that the Hon ble Supreme Court has clearly laid down that 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 1 to 5/claimants. 21. This Court has gone through the award passed by the Claims Tribunal, which reads as under: 22. Thus, it is clear that the Insurance Company has been directed to deposit the lump sum compensation amount along with interest and only after the amount with interest is deposited by the Insurance Company, the said amount was to be apportioned amongst the claimants. The Insurance Company was not directed to calculate the compensation amount with interest as per the share determined by the Claims Tribunal. Under these circumstances, this Court is of the considered opinion, that the Insurance Company did not commit any mistake in deducting the TDS on the entire interest. However, each of the claimant would be entitled to claim refund from the Income Tax Department, in case, if he/she is of the view that excessive tax has been deducted. The co-ordinate bench of this Court in the case of Smt. Draupadibai (Supra) has held as under : 13. It is however, made clear that the aforesaid interpretation of section 194A of the 1961 Act applies only in cases were the compensation amount has been apportioned and the interest payable to each of the claimants i ..... X X X X Extracts X X X X X X X X Extracts X X X X
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