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TMI Blog2013 (10) TMI 786X X X X Extracts X X X X X X X X Extracts X X X X ..... the case of Hansaguri Prafulchandra Ladhani and others v. Oriental Insurance Co. Ltd [2006 (10) TMI 383 - GUJARAT HIGH COURT], it is necessary to obviate such a situation in future for other claimants who may be awarded compensation with interest thereon, and the amount of interest being deposited exceeds Rs. 50,000 but who may not be liable to have any tax deducted at source as per the interpretation placed by us on the provisions of section 194-A of the Act - If the interest for any particular financial year exceeds Rs. 50,000, separately deposit before the Tribunal the amount liable to be deducted at source under the provisions of section 194-A(3)(ix) of the Income Tax Act, 1961 - In view of the conflicting opinion expressed in the two ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... interest. It would meant that the interest received as income on the delayed payment of the compensation determined under Section 28 or 31 of the Acquisition Act is a taxable event. Therefore, we hold that it is a revenue receipt exigible to tax under Section 4 of the Income Tax Act. Section 194-A of the Act has no application for the purpose of this case as it encompasses deduction of the income at the source. However the appellants are entitled to spread over the income for the period for which payment came to be made so as to compute the income for assessing tax for the relevant accounting year. 3. A division bench of this court in Hansaguri Prafulchandra Ladhani and others v. Oriental Insurance Co. Ltd. and others in paragraph-14 h ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... accrued each year is apportioned amongst the claimants on year to year basis. (ii) If the interest payable to any claimant during any particular financial year exceeds Rs. 50,000, the Tribunal shall permit the insurance companies/owners to pay over the amount liable to be deducted at source under section 194-A(3) (ix) to the Income Tax Department in respect of that particular claimant for the particular year, without prejudice to the claimant's case that he is not liable to pay any income tax for that year. (iii) For the financial year(s) for which the interest payable to the concerned claimant does not exceed Rs. 50,000, the Tribunal may permit such claimant to withdraw the amount deposited as per direction I(b) without producing the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... m refund of the amount of excess TDS from the Income Tax Department. 6. In view of the conflicting opinion expressed in the two Division Benches, which have been taken contrary view in the light of the decision of the Apex Court and the Circular issued by the State Government, we deem it appropriate to refer the entire writ petition to the Larger Bench so that the law become clear on the following questions: i. Whether 10% TDS has to be deducted or the period has to be split up by the disbursing authority while making the payment and the disbursing authority cannot deduct any TDS unless the income of the enhanced compensation or the interest on the awarded compensation is spread over the period for which the payment is to be made? ii ..... X X X X Extracts X X X X X X X X Extracts X X X X
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