TMI Blog2023 (2) TMI 926X X X X Extracts X X X X X X X X Extracts X X X X ..... ent of the High Court in such Appeal, would not be exigible to tax, not being an income - till the date of the Judgment of the High Court no TDS can be deducted on the interest component and, as such, the deduction done by the Insurance Company on the interest component of the claim amount is bad in law. Order: The Insurance Company is directed to pay the TDS amount deducted on the interest component of the claim amount, uptill the date of the High Court Judgment along with 9% interest. Any interest on the claim amount after the date of the High Court Judgment, tax has to be collected as income from other sources and, as such, the Insurance Company would be entitled to claim TDS on that component of interest, which accrues after ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 19575/-) 3) Cost : Rs.6614/- 3) Total Payable : Rs.4238880/- 4) Less TDS : Rs.523801/- (@20% on Interest Rs.2619005/-) 5) Total Paid : Rs.3721693/- (Paid on 18/07/2018 vide cheque no.5796 before Ahmedngar Court.) 5. Mrs. M. A. Kulkarni, learned counsel for the Petitioner submits that the TDS deducted on the interest component of the claim amount is unlawful. 6. Mr. P. G. Godhamgaonkar holding for Mr. S. V. Kulkarni, learned counsel for Respondent No.4 / Insurance Company, sub ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nsation would comprise of future loss of income. This is so because, the multiplier method factors this aspect also. At the same time, as noted, the Courts do not award interest on future expenditure since the amount is being paid to the claimant for an expenditure which may be incurred at a later point of time. This dichotomy, thus, between awarding interest on future income while not awarding interest for future expenditure brings out the true character of the interest being awarded. 57. We, therefore, hold that the interest awarded in the motor accident claim cases from the date of the Claim Petition till the passing of the award or in case of Appeal, till the judgment of the High Court in such Appeal, would not be exigible to tax, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... old good. Section 194A of the Income Tax Act, 1961 is particularly considered in the case of Rupesh Rashmikant Shah (supra), and held at Paragraph Nos.58 and 59 as under:- 58. We are not oblivion to erstwhile clause (ix) of sub-section (3) of section 194A or the newly amended clauses (ix) and (ixa) thereof substituting original clause (ix) w.e.f. 1.6.2015 by Finance Act, 2015. Subsection (1) of section 194A provides for deduction of tax at source upon payment of any income by way of interest. Sub-section (3) of section 194A contains exclusion clauses from the purview of sub-section (1). Clause (ix) contained in sub-section (3) prior to amendment pertained to income credited or paid by way of interest on the compensation amount awarded b ..... X X X X Extracts X X X X X X X X Extracts X X X X
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