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TMI Blog2017 (4) TMI 1586X X X X Extracts X X X X X X X X Extracts X X X X ..... iling of ₹ 50,000/- per claimant basis. Looked from any angle, the insurance company was not justified in deducting tax at source while depositing the compensation in favour of the claimants. It therefore, cannot avoid liability of depositing such amount with the Claims Tribunal. The Claims Tribunal had committed no error in insisting on the insurance company in making good the shortfall - Decided in favour of assessee. - D. B. Income Tax Appeal No. 442 / 2011 - - - Dated:- 21-4-2017 - K. S. Jhaveri And Vijay Kumar Vyas, JJ. For Appellant : Mr. P.K. Kasliwal For Respondent : Mr. R.B. Mathur JUDGMENT Per Hon ble Jhaveri, J. 1. By way of this appeal, the appellant has challenged the judgment and order of the T ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... has to pay compensation claims to the claimants as awarded by Motor Accidents Claims Tribunal which includes the amount of claim and interest thereon from the date of claim petition to the date of award of such claim in terms of Section 171 of the Motor Vehicles Act, 1988. The CIT (A) in his order u/s 201(1) read with Section 194A observed that the company has made payment of ₹ 35,79,826/- towards interest on compensation claims awarded by the MACT to various claimants during the year under consideration. He stated that the company was liable to deduct tax at source u/s 194A on the interest payment so made. 3.1 Counsel for the appellant Mr.Jhanwar has relied upon decision of the Allahabad High Court in Commissioner of Income Ta ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he provisions of Section 2(28A) read with Section 194A(1) of the Income Tax Act. 4. Another decision of Gujarat High Court in New India Assurance Co. Ltd. Vs. Bhoyabhai Haribhai Bharvad (2016) 72 Taxmann.com 335 (Gujarat) wherein it been held as under: 12. It would, therefore, be wholly incorrect to read the current provision of sub section (3) of Section 194A to argue that the cases of income credited by way of interest on compensation awarded by the Claims Tribunal is no longer part of sub section (3) for exclusion from purview of sub section (1) of Section 194A. In other words, worded slightly differently. The case of credit of interest on compensation awarded by the Claims Tribunal continues to find place in the exclusion ..... X X X X Extracts X X X X X X X X Extracts X X X X
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