FCS Deepak Pratap Singh
Quick Summary
Rupesh Rashmikant Shah v. UOI (2019) 417 ITR 169 / 182 DTR 203 / 310 CTR 826 / 266 Taxman 474 (Bom.)(HC) Sub: Whether Compensation awarded by Motor Accident Claims Tribunal - Interest on compensation awarded up to date of order of Tribunal or Court is taxable FACTS OF THE CASE Petitioner
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FAQ :
No, the Bombay High Court has held that interest awarded on compensation by the MACT is compensatory in nature and forms part of the compensation itself, making it not taxable.
The interest is considered an integral part of the compensation due to delayed computation, and therefore it is not treated as income from other sources but as part of the overall compensation award.
The article discusses Section 4 (charging section), Section 56(2)(viii) (interest on compensation or enhanced compensation), and Section 145A(b) (method of accounting for interest on compensation).
No, the provision for TDS only applies if the payment is in the nature of income for the payee. If the interest is not taxable, then the liability to deduct tax at source cannot be imposed.
The case discussed is Rupesh Rashmikant Shah v. UOI (2019), heard by the Bombay High Court.
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