The Income Tax Department on Monday sought time to respond to a notice from the Gujarat High Court on the tax demand on death compensation received by the next of kin of a woman killed in the 1986 Pan Am Flight 73 hijacking incident.
The I-T department has sought time to respond to the court’s query on whether such compensation amount awarded by a foreign court can be treated as “income” and if so, under which provisions of the law it intends to levy the tax.
The matter pertains to a petition filed by Kalpesh Babulal Dalal, whose wife was among those killed during the hijacking of the Pan Am flight in 1986 while travelling from Bombay to New York.
🗞️ Subscribe Now: Get Express Premium to access the best Election reporting and analysis 🗞️
Following his wife’s death, Dalal had received nearly Rs 18.60 crore in a compensation ruling by a court in Columbia, New York. He had received the compensation in three tranches of Rs 8.11 crore in FY 2012-13, Rs 34.24 lakh in FY 2013-14, and Rs 10.15 crore in FY 2014-15.
However, the I-T department has sought to reopen the assessment for financial years 2013-14 and 2014-15 claiming the compensation amount was not shown in the I-T returns filed by Dalal. In January, Dalal moved the Gujarat HC following a notice from the I-T department last year challenging the taxman’s move to impose income tax for the compensation amount.
The petitioner has contended that the compensation amount is not an income and hence, cannot be taxed. During the course of the hearing, Dalal also pointed out that the investigation wing of the I-T department had issued a summons in 2014 to which he had responded. The petitioner said he had also responded to all queries pertaining to bank transactions.
Terming it a “unique” case, a division bench comprising Justices JB Pardiwala and Nisha Thakore had, on January 24, issued a notice to the I-T department to respond to the contentions raised by the petitioner.
The matter will next be taken up on March 14.
Trupti Dalal was travelling on the Pan Am flight with her 21-member dance troupe and her 11-year-old son for a cultural performance. Twenty passengers, including two Americans and 13 Indians were killed, after the Mumbai-New York flight with 360 passengers on board was hijacked by four Palestinian militants on September 5, 1986, from Karachi in Pakistan.