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TMI Blog2002 (10) TMI 740X X X X Extracts X X X X X X X X Extracts X X X X ..... alf of the claimants even after issuance of S.P.C. and repeated regd. notices by this Court. Shri V.P. Khare, learned Deputy Govt. Advocate appeared for the State. 3. The Reference Court has stated the following facts for recording opinion of this Court that at the instance of Executive Engineer, Public Works Department, Madhya Pradesh, the lands situated at Jawahar Marg, Indore, were acquired for construction of Siyaganj Over-bridge by the Collector and Land Acquisition Officer, Indore, and in this connection Land Acquisition Case No. 116-A/82/73-74 was instituted at the instance of one Parwatibai w/o Modilal and his husband Modilal s/o Birdichand, the occupier of the above-mentioned land and property in the Court of Land Acquisition Officer, Indore. An Award was passed in favour of Parwatibai and Modilal to the tune of Rs. 51,801.75 Ps. Thereafter the aforesaid persons made a request for a reference against the aforesaid award to the Court of Additional Judge to the Court of District Judge, Indore. The reference was under section 18 of the Land Acquisition Act. The reference was registered in the Court of Additional Judge to the Court of District Judge, Indore as Land Acquisiti ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e Land Acquisition Officer, Indore vide letter dated 14-10-1991 (Annexure-"D") replied and denied his liability to deduct the tax and directed the Court to do so. Therefore, on the aforesaid facts, the Court has formulated the aforesaid questions and had sought opinion of this Court. 4. I have heard Shri R.L. Jain, learned counsel appearing for Income-tax Department of the Union of India and also Shri V.P. Khare, learned Deputy Govt. Advocate for the State of Madhya Pradesh. None appeared on behalf of claimants. 5. Shri R.L. Jain submitted that under section 194-A of the Income-tax Act, 1961, tax is to be deducted by the person responsible for paying any income by way of interest and has also placed reliance on a decision in the case of Baldeep Singh v. Union of India [1993] 199 ITR 628 1, in which it has been held by the Punjab Haryana High Court that the Executing Court is not the person responsible for paying the interest. Therefore, the Executing Court is not liable to deduct tax at source on such interest. It is the person responsible for paying "any Income by way of interest" is responsible. His further submission is that under section 194-A of the Income-tax Act, 1961, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... g the financial year by the person referred to in sub-section (1) to the account of, or to, the payee, does not exceed two thousand five hundred rupees: Provided that in respect of the income credited or paid in respect of (a) time deposits with a banking company to which the Banking Regulation Act, 1949 (10 of 1949) applies (including any bank or banking institution referred to in section 51 of that Act); or (b) time deposits with a co-operative society engaged in carrying on the business of banking; (c) deposits with a public company which is formed and registered in India with the main object of carrying on the business of providing long-term finance for construction or purchase of houses in India for residential purposes and which is for the time being approved by the Central Government for the purpose of clause (viii) of sub-section (1) of section 36, the provisions of this clause shall have effect as if for the words two thousand five hundred rupees , the words ten thousand rupees had been substituted and the aforesaid amount shall be computed with reference to the income credited or paid by a branch of the banking company or the co-operative society or the publ ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ofits Tax Act, 1963 (14 of 1963), or the Companies (Profits) Surtax Act, 1964 (7 of 1964), or the Interest-tax Act, 1974 (45 of 1974). Explanation. For the purposes of clauses (i), (vii) and (viia ), time deposits means deposits (excluding recurring deposits) repayable on the expiry of fixed periods. (4) The person responsible for making the payment referred to in sub-section (1) may, at the time of making any deduction, increase or reduce the amount to be deducted under this section for the purpose of adjusting any excess or deficiency arising out of any previous deduction of failure to deduct during the financial year." "204. Meaning of person responsible for paying . For the purposes of sections 192 to 194, section 194A, section 194B, section 194BB, section 194C, section 194D, section 194E, section 194EE, section 194F, section 194G, section 194H, section 194-I, section 194J, section 194K, section 194L, sections 195 to 203 and section 285 the expression person responsible for paying means (i) in the case of payments of income chargeable under the head Salaries , other than payments by the Central Government or the Government of a State, the employer himself or, if ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e by way of interest to the assessee. The real person responsible for paying Income-tax by way of interest is Land Acquisition Officer/Collector who had money in his possession and was responsible for making the payment of that income to the assessee. 9. It has been clearly held by the Division Bench of Punjab Haryana High Court in the case of Tuhi Ram v. Land Acquisition Collector [1993] 199 ITR 4901 , that the Income-tax is payable only on the amount of interest payable as compensation for the acquisition of any property and the income by way of interest so received as above has to be spread over all the years for all purposes of assessment of Income-tax from the time it becomes due. 10. Therefore, in view of the aforesaid submissions and in view of the foregoing discussions in the opinion of this Court answer to question (a) is that under section 194-A of the Income-tax Act, 1961 the tax deduction at source is permissible in respect of interest accrued on interest payable on enhanced compensation under sections 18 and 30 of the Land Acquisition Act. As regards question (b) the Court is not liable to deposit the tax by TDS Challan and to issue Deduction Certificate in Form ..... X X X X Extracts X X X X X X X X Extracts X X X X
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