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2016 (12) TMI 1090 - SUPREME COURTPayment of interest under Section 234B and Section 234C - Levy of interest as ordered/affirmed by the High Court[2012 (8) TMI 526 - MADRAS HIGH COURT] - nature of receipt - whether amount received is on account of 'salary' or the same is a 'capital receipt'? Held that:- A perusal of the relevant provisions of Chapter VII of the Act [Part A, B, C and F of Chapter VII] would go to show that against salary a deduction, at the requisite rate at which income tax is to be paid by the person entitled to receive the salary, is required to be made by the employer failing which the employer is liable to pay simple interest thereon. The provisions relating to payment of advance tax is contained in Part 'C' and interest thereon in Part 'F' of Chapter VII of the Act. In cases where receipt is by way of salary, deductions under Section 192 of the Act is required to be made. No question of payment of advance tax under Part 'C' of Chapter VII of the Act can arise in cases of receipt by way of 'salary'. If that is so, Part 'F' of Chapter VII dealing with interest chargeable in certain cases (Section 234B – Interest for defaults in payment of advance tax and Section 234C – Interest for deferment of advance tax) would have no application to the present situation in view of the finality that has to be attached to the decision that what was received by the appellant – assessee under the Non-Compete Agreement was by way of salary. For the aforesaid reasons, the appeals are allowed; the order of the High Court so far as the payment of interest under Section 234B and Section 234C of the Act is set aside.
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