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TMI Blog2010 (9) TMI 738X X X X Extracts X X X X X X X X Extracts X X X X ..... laimants comes to Rs. 20,208.33 which does not exceed the limit of Rs. 50,000 provided under section 194A(3)(ix) of the 1961 Act, therefore, the Insurance Company is not entitled to deduct the tax at source while depositing the amount of interest payable to the respondent claimant before the Tribunal. X X X X Extracts X X X X X X X X Extracts X X X X ..... 6. By the award dated 14-3-2005 the Claims Tribunal while awarding the compensation of Rs. 7,85,000 to the respondents-claimants has apportioned the amount of compensation amongst the claimants by awarding Rs. 3,00,000 to respondent No. 1 Draupadi Bai (wife), Rs. 75,000 each to respondent No. 2 Surendra (son) and respondent No. 3 Sushil (son), Rs. 1,35,000 to respondent No. 4 Ku. Shweta (daughter) and Rs. 1,00,000 each to respondent No. 5 Khimmabai (mother) and respondent No. 6 Dojpal (father). The Tribunal awarded interest at the rate of 9 per cent from the date of application on the compensation amount and further directed that the interest amount will be equally payable to the claimants. 7. Section 194A of the 1961 Act deals with the d ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... idual, HUF, company etc. satisfying the conditions mentioned therein is covered within the meaning of resident in India. 9. Under section 194A(1) the deduction of tax at source is permissible while paying income by way of interest to a resident. A combined reading of section 194A, section 2(42) and Section 6 of the 1961 Act makes it clear that each individual claimant in an award of the Tribunal, a resident for the purpose of Income-tax Act. 10. In a case where the claimants are more than one and the Tribunal has apportioned the compensation amount and the amount payable by way of interest to each of the claimant is ascertainable from the award of the Tribunal, then for the purpose of deducting tax at source under section 194A the interes ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ch deposit(s) has definite information about the beneficial ownership of the deposit(s), the interest payable under a joint account can be aggregated with the amount of interest payable by that person to any one of the payees in their separate or independent accounts. The persons responsible for deducting the tax or advised that, in the absence of any information to the contrary, they may aggregate the interest on a joint account with the interest on deposit in the individual's account who has higher interest income. Thus, if there is a deposit of Rs. 5,000 in a joint account of XY and there are deposit of Rs. 4,000 in the name of X and Rs. 3,000 in the name of Y with the same payer, the rate of interest being 12 per cent per annum, the pay ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... be misreading of the section to hold that it provides for clubbing of interest income of all the claimants for the purpose of calculating the limit of Rs. 50,000 under section 194(3)(ix), even when interest payable to each claimants is ascertainable. 13. It is however, made clear that the aforesaid interpretation of section 194A of the 1961 Act applies only in cases where the compensation amount has been apportioned and the interest payable to each of the claimants is ascertainable but the position may be different when no such apportionment is done by the Tribunal in the award and interest payable to each claimant separately is not ascertainable at the time of depositing the interest amount before the Tribunal. 14. Coming to the facts o ..... X X X X Extracts X X X X X X X X Extracts X X X X
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