The central legal point established in the judgment is that the payment of compensation on account of death and injury is not a business transaction and does not warrant the imposition of TDS by the Insurance Company.

Amit Rawal, J.

Challenge in the present petitions is to the impugned orders passed by the Executing Court, vide which Insurance Company has been called upon to pay the amounts of T.D.S. deducted on the interest income which was deposited by the Insurance Company with the Income Tax Department, as per the provisions of Income Tax Act, 1961.

2. This Court had appointed Mr. Pankaj Jain, Senior Advocate as Amicus Curiae to assist the Court whether in cases where the claimants are given compensation in view of the death or injury, the TDS is liable to be deducted or not.

3. Mr. Pankaj Jain, learned Senior counsel assisted by Mr. Sachin Bhardwaj, Advocate in support of his contentions relied upon the judgment dated 15.10.2014 passed in CWPIL No. 9 of 2014 titled as Court on its own motion v. The H.P. State Cooperative Bank Limited and others, to contend that in such cases, Insurance Company is not liable to impose TDS. The aforementioned judgment has been rendered after taking into consideration various judgments of the Hon'ble Supreme Court. The Insurance Company has been compelled to approach this Court owing to the orders passed by the Executing Court calling upon Insurance Company to deduct the TDS. It is in these circumstances, the aforementioned revision petitions have been filed.

4. I have heard learned counsel for the parties and appraised the paper books.

5. Paragraphs 22 and 23 of the aforementioned judgment rendered by the Himachal Pradesh Shimla High Court read thus:--

"22. The Apex Court in another case titled Commissioner of Income Tax, Faridabad Vs. Ghanshyam (HUF), (2009) 8 SCC 412, laid down similar preposition. It is apt to reproduce paragraphs 24, 25 and 27 hereunder:

"24. To sum up, interest is different from compensation. However, interest paid on the excess amount under Section 28 of the 1894 Act depends upon a claim by the person whose land is acquired whereas interest under Section 34 is for delay in making payment. This vital difference needs to be kept in mind in deciding this matter. Interest under Section 28 is part of the amount of compensation whereas interest under Section 34 is only for delay in making payment after the compensation amount is determined. Interest under Section 28 is a part of enhanced value of the land which is not the case in the matter of payment of interest under Section 34.

25. It is clear from reading of Sections 23(1A), 23(2) as also Section 28 of the 1894 Act that additional benefits are available on the market value of the acquired lands under Section 23(1A) and 23(2) whereas Section 28 is available in respect of the entire compensation. It was held by the Constitution Bench of the Supreme Court in Sunder Vs. Union of India (UOI), that "indeed the language of Section 28 does not even remotely refer to market value alone and in terms it talks of compensation or the sum equivalent thereto. Thus, interest awardable under Section 28, would include within its ambit both the market value and the statutory solatium. It would be thus evident that even the provisions of Section 28 authorise the grant of interest on solatium as well." Thus solatium means an integral part of compensation, interest would be payable on it. Section 34 postulates award of interest at 9% per annum from the date of taking possession only until it is paid or deposited. It is a mandatory provision. Basically Section 34 provides for payment of interest for delayed payment.

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27. In the case of Hindustan Housing (supra) certain lands belonging to the assessee-company, which was in the business of dealing in land and which maintained its account on mercantile system, were first requisitioned and then compulsorily acquired by the State Government. The Land Acquisition Officer awarded Rs. 24,97,249/- as compensation. On appeal the Arbitrator made an award at Rs. 30,10,873/- with interest at 5% from the date of acquisition. Thereupon, the State preferred an appeal to the High C