Should the amount be taxed if the husband gets compensation for the wife’s death in a terrorist attack, should this amount be taxed? Such a question has been raised in the Gujarat High Court. A bench of High court judge JB Pardiwalki raised such questions to the revenue department.
A bench of the Gujarat High Court on Monday questioned the Income Tax department whether the proceeds as compensation for those killed in terrorist attacks could be taxable under the Income Tax Act Can the notice issued for assessment under Section 141 of the Income Tax Act be canceled?
Reportedly, the family of the woman killed in the terrorist attack had a huge amount of compensation (about Rs 20 crore). The next hearing in the case is scheduled for March 14. The income tax department asked the High court to give time to file a reply on the matter. On the other hand, the petitioner’s counsel said the main compensation in the case was $10 million.
What was the incident?
United States of America‘s Pen M Flight 73 on 5/9/1986 was on its way to New York from Mumbai. The aircraft was hijacked by terrorists of the Abu Nidal organization, Palestine, and taken to Karachi (Pan Am flight 73 that was hijacked in 1986). The aircraft consisted of 388 passengers, whose base included 365 pilgrims from 14 countries and 23crew members.
In this attack, 51 people were injured at the 12-hour mark. The woman from Gujarat was one of them who flew to New York. The husband of the deceased, Trupti Dalal filed a case against the airline. Libya and the American government delivered compensation to the victims’ families.
After that, the Income Tax Department sent a notice to the compensated families. Again, on March 31, 2021, the Income Tax Department has filed a notice to those families regarding tax collection.
