Dear Sir,
As per facts of our client's case, they had entered into agreement with a power company for supply of solar power. The client had assured the power co. that whatever surplus power would be generated by the plant, the client would ensure that the power co. could supply same to the Grid and earn incomes.
However, the client could not obtain necessary approvals as a result of which the power co. suffered losses. Now as per the contract, the client has to pay compensation to the power co. My question is whether TDS would be deductible on this compensation/liquidated damages?
Client Owes Compensation to Power Company for Approval Failure; TDS Applicability Questioned, Citing ITAT Kolkata Case A client entered into an agreement with a power company to supply solar power, promising that any surplus would be supplied to the grid. Due to a failure to obtain necessary approvals, the power company incurred losses, and the client must now pay compensation as per the contract. The query raised concerns whether Tax Deducted at Source (TDS) applies to this compensation. One response suggested that TDS is not applicable, while another mentioned existing judgments on similar matters, referencing a case from the Income Tax Appellate Tribunal in Kolkata. (AI Summary)
TaxTMI 
TaxTMI 
TaxTMI 
