The Gujarat High Court to decide the applicability of income tax on the amount of compensation received towards death of a woman in a terrorist attack. The husband of the deceased received compensation due to death of his wife during hijacking of the Mumbai to New York bound Pan American World Airways flight and killing of a woman by terrorists.
A bench of Justice JB Pardiwala and Justice Nisha Thakore was hearing a case filed by Kalpesh Dalal challenging a notice issued by the income tax department for tax on the compensation. Dalal’s wife Trupti was among the 50 people killed by the terrorist of almost Rs 20 crore he received as per the order issued by a court in New York.
Following a notice from the income tax department to pay tax on the compensation received towards death of kin in a terrorist attack as the same can be termed as ‘income’ and subject to tax under Income Tax Act, the petitioner approached the Court.
On the request of the lawyer of the IT department, the court posted the matter for further hearing on March 14.
The Income Tax department had sought to tax the compensation he received between 2012 and 2014. He first received Rs 8.11 crore in 2012-13, Rs 34.24 lakh the next year and Rs 10.15 crores in 2014-2015. The petition was filed after the IT department reopened the assessment of the income after it raised the query in 2014.
The man got actual compensation of ten million dollars but after the lawyers fee, the balance amount was Rs 20 crore. The Libyan government had taken the responsibility and paid an amount of 1.4 billion dollars to the US government. Dalal instituted the case before the court in the US and later was awarded the amount.
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