Motor Accident Claim Tribunal

[RAHUL MALHOTRA]

Hello Sir, My client has been awarded 5 lacs by Motor Accident Tribunal on account of accident in the form of Fixed Deposits. We have declared the FD Income in our return but have not disclosed the amount awarded and interest received by tribunal. Now issue arises when we claimed our TDS deducted on amount of interest awarded by tribunal in ROI, AO issued notice u/s 148 reasoning that you have not shown amount that you received as compensation and interest in your ROI. In my opinion it is a capital receipt and not taxable. Disability is partial. Kindly advise.

AI Summary

Tax Authority Issues Notice Under Section 148 for Undisclosed Motor Accident Compensation and Interest; Clarification Sought on Taxability A user seeks advice regarding a tax issue involving a client's compensation from a Motor Accident Claim Tribunal. The client received 5 lakhs in fixed deposits as compensation, and while the FD income was declared in their tax return, the compensation amount and interest were not disclosed. The tax authority issued a notice under section 148 for not showing the compensation and interest in the return. The user believes the compensation is a capital receipt and not taxable, noting the client's partial disability, and seeks guidance on this matter.