Principal Commissioner Of Income Tax, Delhi-8 v. Star Realty Pvt. Ltd

$~2 IN THE HIGH COURT OF DELHI AT NEW DELHI + ITA 15/2018 & CM APPL. 810-811/2018 PRINCIPAL COMMISSIONER OF INCOME TAX, DELHI-8 ..... Appellant Through: Mr. Rahul Chaudhary with Ms. Vibhooti Malhotra, Advocates versus STAR REALTY PVT. LTD. ..... Respondent Through: Mr. Ved Jain with Mr. Pranjal Srivastava, Advocates CORAM:HON'BLE MR. JUSTICE S. RAVINDRA BHAT HON'BLE MR. JUSTICE A. K. CHAWLA O R D E R% 09.02.2018 The question of law which the Revenue urges in this appeal is ; “Whether the sum of ` 1.95 crores, which the –assessee received in satisfaction of its claims, through the settlement recorded by the Court by way of compromise, under Order XXIII Rule 1, settlement leading to withdrawal of litigation, was tax deductable under Section 194A ?”. The AO made certain disallowances and held the said amount to be subject to tax. The CIT(A) and ITAT differed and set aside the AO’s decision. It was held that the amount represented Court mandated compensation and therefore, could not be subject to accrued –TDS since the principal amount has been deposited/paid back by the assessee along with the additional sum as part of the full and final settlement. Page 1 of 2 The ITAT’s view finds support in the judgment of the Supreme Court in Lt. Col. K.D. Gupta vs. Union of India, 1990 (181) ITR 530 (SC). The view is also supported by the judgment of the Supreme Court in All India Reporter Ltd. vs. Ramachandra Dhondo Datar, (41) ITR 446 (SC). Consequently, no question of law arises. The appeal is accordingly dismissed. S. RAVINDRA BHAT, J FEBRUARY 09, 2018/P A. K. CHAWLA, J