CIT CENTRE CIRCLE -22 vs. KOHINOOR FOODS LTD (FORMERLY KNOWN AS ) M/S SATNAM OVERSEAS LTD

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ITA/78/2015HC DelhiDLHC01271530201420 April 2015Bench: HON'BLE MR. JUSTICE S. RAVINDRA BHAT,HON'BLE MR. JUSTICE R.K.GAUBA2 pages
AI SummaryPartly Allowed

What did the High Court hold?

The Tribunal (High Court) held that the deduction of TDS by New India Assurance Company Limited was in accordance with the law. The reasoning was based on the submission by the Senior Standing Counsel for the Income Tax Department, which stated that interest on compensation awarded by the Motor Accident Claims Tribunal is exempted from TDS only if the aggregate interest paid during the financial year does not exceed Rs. 50,000/- under Section 194A(3)(ix) of the Income Tax Act. In this case, the interest amount of Rs. 7,48,234/- clearly exceeded the Rs. 50,000/- threshold, thus necessitating the TDS deduction. The Court directed New India Assurance Company Limited to handover the TDS certificate to the appellants within three weeks if not already provided. No issue was expressly left undecided.

What were the facts?

This matter concerns an appeal before the High Court of Delhi. The appellants are Sarita & Ors., and the respondents include Neeraj & Ors. (The New India Assurance Co Ltd) and the Income Tax Department. The New India Assurance Company Limited deposited Rs. 15,54,587/-, which included an interest component of Rs. 7,48,234/-. As this interest exceeded Rs. 50,000/-, the company deducted Tax Deducted at Source (TDS) amounting to Rs. 1,49,647/- in accordance with Section 194A of the Income Tax Act. The appeal was disposed of on September 20, 2016.

What were the issues?

1. Whether interest on the compensation amount awarded by the Motor Accident Claims Tribunal is exempted from TDS if the aggregate interest paid during the financial year does not exceed Rs. 50,000/- under Section 194A(3)(ix) of the Income Tax Act? Assessee's Contention: The judgment does not record any specific contentions from the appellants (Sarita & Ors.). Revenue's Contention: The Senior Standing Counsel for the Income Tax Department submitted that interest on the compensation amount awarded by the Motor Accident Claims Tribunal is exempted from TDS if the aggregate interest amount paid during the financial year does not exceed Rs. 50,000/- under Section 194A(3)(ix) of the Income Tax Act. The revenue further argued that since the interest amount of Rs. 7,48,234/- exceeded Rs. 50,000/-, the deduction of TDS by New India Assurance Company Limited was in accordance with the law.

Which sections of the Income-tax Act were involved?

Section 194A,Section 194A(3)(ix)

AI-generated summary — verify with the full judgment below

$~11 * IN THE HIGH COURT OF DELHI AT NEW DELHI + MAC.APP. 78/2015 SARITA & ORS ..... Appellants Through: Mr. Sanjeev Narang and Mr. Niranjan Bharti, Advs. versus NEERAJ & ORS (THE NEW INDIA ASSURANCE CO LTD) ..... Respondents Through: Mr. Asheesh Jain, Senior Standing Counsel for Income Tax Department with Mr. Vikrant A. Maheshwari, Adv. Mr. Sanjay Kumar Pathak, proxy counsel for R3. CORAM: HON'BLE MR. JUSTICE J.R. MIDHA O R D E R % 12.09.2017 1. Mr. Asheesh Jain, Senior Standing Counsel for Income Tax Department submits that interest on the compensation amount awarded by the Motor Accident Claims Tribunal is exempted from deduction of TDS if the aggregate interest amount paid during the financial year does not exceed Rs.50,000/- under Section 194A(3)(ix) of the Income Tax Act. 2. In the present case, New India Assurance Company Limited has deposited Rs.15,54,587/- which includes interest of Rs.7,48,234/-. Since the interest amount exceeds Rs.50,000/-, New India Assurance Company Limited has deducted Rs.1,49,647/- in accordance with Section 194A of the Income Tax Act. The deduction of TDS is in accordance with the law. 3. New India Assurance Company Limited is directed to handover the TDS certificate to the appellants within a period of three weeks from today,

if not already handed over. 4. This appeal has been disposed of on 20th September, 2016 and need not be listed again. 5. This Court appreciates the assistance rendered by Mr. Asheesh Jain, Senior Standing Counsel for Income Tax Department in this matter. 6. Copy of this order be given dasti to learned counsels for the parties under signature of Court Master. J.R. MIDHA, J. SEPTEMBER 12, 2017 ak

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