Chennai: The Madras high court docket has stated compensation provided through the Motor twist of fate Claims Tribunal or the hobby accruing therein cannot be subjected to tax deducted at source (TDS).
A civil revision plea turned into filed by way of the coping with Director, Tamil Nadu state deliveryorganization (Salem) restrained, Dharmapuri, against an order exceeded with the aid of extra Districtchoose, rapid track court, directing the enterprise to deposit the quantity deducted as TDS to the MACT claimant.
“The question is whether the provisions of income Tax Act,1961, and greater specially, whether or notthe repayment presented by way of the MACT to the victim may be categorised as a taxable incomebeneath the profits Tax law? the answer to this query inside the opinion of this court is within the bad,” Justice MV Muralidaran stated, brushing off the petition.
the matter pertains to Rs four,23,271 as repayment presented through the lower court to Chinnadurai and a memo was filed by way of the delivery business enterprise deducting Rs 24,017 as TDS whichbecome challenged following which the decrease court directed the enterprise to deposit Rs 30,774 inside the sufferer‘s account.
Aggrieved through the order, the shipping agency filed the civil revision petition.
suggest for the company argued that as in step with section 194-A and 156 of the earnings Tax Act,1961,hobby provided by way of the MACT must be problem to TDS and justified the deduction.
Justice Muralidaran, who noted a order of Himachal Pradesh excessive courtroom, said, “The Motorautomobiles Act is one such rules which has been exceeded with a benevolent purpose for compensating the accident victims who have suffered physical disablement or loss of life and the profits Tax Act that istypically intended for Tax collection through the country can’t placed spokes inside the powerful and efficacious enforcement of the Motor vehicles Act….”
“…This court docket arrives at the conclusion that the compensation provided or the interest accruing therein from the compensation that has been offered through the MACT can not be subjected to TDS and the identical can’t be insisted to be paid to the Tax government since the reimbursement and the hobbypresented therein does no longer fall beneath the term ‘earnings‘ as defined beneath the income tax act, 1961.”
The decide directed the shipping organization no longer to deduct any quantity toward TDS and to deposit the identical additionally inaddition to the amount that become already deposited at the record of MACT, Dharmapuri inside a duration of 4 weeks.
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