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Issues involved: Interpretation of deduction of income-tax at source from a decree amount.
Summary: The High Court of Calcutta disposed of an appeal where the appellant was directed to pay a specific sum with interest by a decree. The appellant chose to pay the amount after deducting income-tax at source, which was paid to the respondent in Bombay. The respondent contended that there should be no deduction of income-tax from the directed payment, citing the case law of All India Reporter Limited v. Ramchandra D. Datar [1961] 41 ITR 446 (SC) which established that income-tax deduction does not apply to certain types of payments under a decree. The court agreed with the respondent, stating that the amount was payable as "judgment-debt" and not as "salary," hence income-tax deduction was not permissible. Therefore, the respondent succeeded in the appeal. Regarding the payment, if the appellant pays a specified sum to the respondent and the costs within a fortnight, the operation of the decree will be stayed. Failure to do so will result in dismissal of the appeal. The appellant can recover the tax amount deducted at source by taking necessary steps with income-tax authorities, with the respondent's cooperation. The appellant can withdraw the security furnished upon payment of the specified sum to the respondent. All parties are directed to act as per the signed copy of the minutes. Judge Dipak Kumar Sen concurred with the judgment.
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