TaxTMI 
TaxTMI 
2006 (10) TMI 383
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.... Ladhani (hereinafter referred to as "the deceased") on 1.4.1991 in a motor vehicle accident Page 2103 between an Ambassador car in which the deceased was travelling and a public carrier truck. The claim petition was filed by Smt. Hansaguri, widow of the deceased, four daughters (claimant Nos. 2 to 5) and son Naresh (claimant No. 6). 2.2 The original claim petition being MAC Petition No. 743 of 1991 was filed on 30.9.1991 before the Motor Accident Claims Tribunal at Junagadh. Upon constitution of the Motor Accident Claims Tribunal at Veraval, the said petition was transferred to Veraval in the year 1999 and thereafter upon constitution of the Tribunal at Rajkot, the claim petition was numbered as MAC Petition No. 2240 of 2000. Ultimately the Tribunal at Rajkot allowed the claim petition and made an award for Rs. 11,78,000/- with proportionate costs and with interest at the rate of 9% per annum from the date of filing the petition i.e. 30.9.1991 till the date of payment. It was further directed that the amount, if any, paid as interim compensation shall be adjusted against the above liability. So also the amount of deficit court fee stamp, if any, shall be deducted from the sa....
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....that the balance amount may be divided equally amongst the other claimants being claimant Nos. 2 to 6 which amount works out to Rs. 1,52,800/- for each of claimant Nos. 2 to 6. On that basis Mr. Sheth has produced a statement giving detailed calculations of the interest income payable to each of the claimants from the year 1991-92 to subsequent years. It transpires from the said statement that out of the total interest of Rs. 15,47,902/-, the amount of interest income payable to all the six claimants for the period from 30.9.1991 to 31.3.1992 was Rs. 51,885/- and that for the subsequent years 1992-93 onwards the total interest amount payable to all the six claimants every year till 31.3.2006 was Rs. 1,03,770/-. The amounts are further subdivided as interest payable to each of the claimants in each of the sixteen years. The statement submitted by Mr. Sheth is taken on record. 6. Mr. Sheth has contended that the Insurance Company is not justified in paying the amount of Rs. 1,70,249/- to the Income-tax Department as Tax Deducted at Source. It is contended that if the details given in the chart produced today are taken into consideration, there would not be any tax liability of ....
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.... The relevant provisions of Section 194A of the Income-tax Act, 1961 (hereinafter referred to as 'the Act') read as under: 194A. Interest other than 'Interest on securities'. (1) Any person, not being an individual or a Hindu undivided family, who is responsible for paying to a resident any income by way of interest other than income by way of interest on securities, shall, at the time of credit of such income to the account of the payee or at the time of payment thereof in cash, or by issue of a cheque or draft or by any other mode, whichever is earlier, deduct income-tax thereon at the rates in force. Provided that... (3) The provisions of Sub-section (1) shall not apply - (i) to (viii)... (ix) to such income credited or paid by way of interest on the compensation amount awarded by the Motor Accident Page 2106 Claims Tribunal where the amount of such income or, as the case may be, the aggregate of the amounts of such income credited or paid during the financial year does not exceed fifty thousand rupees. 10. While at the first blush the provisions may prima facie justify the deduction of tax at source by the....
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.... be equally divided amongst the five children (claimant Nos. 2 to 6). On that basis, Mr. Sheth has submitted Page 2107 the detailed calculations. Even from the statement submitted by the Insurance Company, it is clear that the amount of interest accrued on the amount of compensation awarded by the Tribunal is total amount of Rs. 51,885/- in the year ending on 31.3.1992 and in each of the subsequent years the total amount of interest accrued every year was Rs. 1,03,770/-. In each year, therefore, the interest accrued will have to be apportioned amongst the six claimants in the aforesaid ratio as per the statement produced by Mr. Sheth. As per the said statement, in the last 15 years, the interest earned by claimant No. 1 Hansaguriben (widow of the deceased) on the compensation awarded to her was Rs. 35,010/- every year and the interest earned by each of the five children every year was Rs. 13,752/-. On behalf of the claimants, claimant No. 6 Naresh Prafulchandra Ladhani, son of the deceased, has filed affidavit dated 22.9.2006 giving particulars about Permanent Account Nos. and the years in which claimant Nos. 1 to 4 and claimant No. 6 have filed income-tax returns and the income re....
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....arate deposit. II. (i) The Tribunal shall take into account the principles laid down in this judgment and ensure that the amount of interest accrued each year is apportioned amongst the claimants on year to year basis. (ii) If the interest payable to any claimant for any particular financial year exceeds Rs. 50,000/-, the Tribunal shall permit the Insurance Companies/owners to pay over the amount liable to be deducted at source under Section 193(3)(ix) of the Income-tax Department in respect of that particular claimant for that particular year, without prejudice to the claimant's case that he is not liable to pay any income-tax for that year. (iii) for the financial year/s for which the interest payable to the concerned claimant does not exceed Rs. 50,000/-, the Tribunal may permit such claimant to withdraw the amount deposited as per direction I(b) without producing the certificate from the concerned income-tax authority that there is no income-tax liability on the interest which has accrued on the compensation awarded by the Tribunal. (iv) It is clarified that the amount other than the amount liable to be deducted at source under Section 19....