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

Compensation treatment: tribunal-awarded amount and interest led to reassessment notice for alleged nondisclosure despite TDS claim. Issue whether tribunal-awarded compensation paid as fixed deposits and tribunal-credited interest, not disclosed in the original return though FD interest was declared and TDS claimed, are taxable; assessment officer issued a notice under section 148 for alleged nondisclosure of compensation and interest, while the taxpayer contends the compensation is a capital receipt and not taxable.