Court Quashes Order on Compensation Tax Deduction

The court quashed the Seventh Motor Accidents Claims Tribunal's order directing an insurance company to deposit T.D.S. deducted from compensation under Section 194-A of the Income Tax Act. The court held that the deduction was proper based on precedents from Gujarat High Court and the High Court of Madhya Pradesh. The petition was allowed, and the court disposed of the matter by overturning the tribunal's decision to pay the deducted sum of Rs. 12,800 to the claimants.

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Issues involved: Challenge to order directing insurance company to deposit T.D.S. deducted from compensation u/s 194-A of Income Tax Act.

Summary:
The petitioner insurance company challenged the order of the Seventh Motor Accidents Claims Tribunal directing the deposit of T.D.S. deducted from compensation. The petitioner contended that the deduction was proper as per Section 194-A of the Income Tax Act, citing precedents from Gujarat High Court and the High Court of Madhya Pradesh. The respondents supported the tribunal's order, but the court held that the deduction of income tax under Section 194-A was justified based on previous judgments. The court quashed the tribunal's order directing the payment of the deducted sum of Rs. 12,800 to the claimants, allowing the petition and disposing of the matter accordingly.

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