9911796707
TMI Blog2023 (2) TMI 926X X X X Extracts X X X X X X X X Extracts X X X X ..... ases from the date of the Claim Petition till the passing of the award or in case of Appeal, till the judgment of the High Court in such Appeal, would not be exigible to tax, not being an income - till the date of the Judgment of the High Court no TDS can be deducted on the interest component and, as such, the deduction done by the Insurance Company on the interest component of the claim amount is bad in law. Order: The Insurance Company is directed to pay the TDS amount deducted on the interest component of the claim amount, uptill the date of the High Court Judgment along with 9% interest. Any interest on the claim amount after the date of the High Court Judgment, tax has to be collected as income from other sources and, as such, the Insu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Rs.523801/- (@20% on Interest Rs.2619005/-) 5) Total Paid : Rs.3721693/- (Paid on 18/07/2018 vide cheque no.5796 before Ahmedngar Court.) 5. Mrs. M. A. Kulkarni, learned counsel for the Petitioner submits that the TDS deducted on the interest component of the claim amount is unlawful. 6. Mr. P. G. Godhamgaonkar holding for Mr. S. V. Kulkarni, learned counsel for Respondent No.4 / Insurance Company, submits that it is permissible to deduct TDS on the interest component, as the same is permitted under Section 194A of the Income Tax Act, 1961 and since no exemption is permitted from TDS, it is to be deducted. 7. This issue has been considered by the Division Bench of this Court in the case of Rupesh Rashmikant Shah Vs. Union of India ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... awarding interest on future income while not awarding interest for future expenditure brings out the true character of the interest being awarded. 57. We, therefore, hold that the interest awarded in the motor accident claim cases from the date of the Claim Petition till the passing of the award or in case of Appeal, till the judgment of the High Court in such Appeal, would not be exigible to tax, not being an income. This position would not change on account of clause(b) of section 145A of the Act as it stood at the relevant time amended by Finance Act, 2009 which provision now finds place in sub-section (1) of section 145B of the Act. Neither clause (b) of section 145A, as it stood at the relevant time, nor clause (viii) of sub-section ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 015 by Finance Act, 2015. Subsection (1) of section 194A provides for deduction of tax at source upon payment of any income by way of interest. Sub-section (3) of section 194A contains exclusion clauses from the purview of sub-section (1). Clause (ix) contained in sub-section (3) prior to amendment pertained to income credited or paid by way of interest on the compensation amount awarded by the Motor Accident Claims Tribunal where such amount did not exceed Rs.50,000/-. In substitution of this provision, clause (ix) now provides that the provision of sub-section (1) will not apply to such income credited by way of interest on the compensation awarded by the Motor Accident Claims Tribunal. Clause (ixa) virtually retains the original provisio ..... X X X X Extracts X X X X X X X X Extracts X X X X
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