Interest on compensation for personal disability cannot be taxed

As we have noted earlier in this order, the assessee had to go right upto Hon’ble Supreme Court to have her compensation claim accepted. What ought to have been paid to her soon after the accident, was eventually paid in full after twenty one years of the tragic incident. Hon’ble Supreme Court, vide judgment dated 26th April 2011, concluded that “Considering all this, we grant compensation of Rs 15 lacs (Rupees fifteen lacs) with interest at the rate of 8% on the enhanced compensation from the date of filing the claim petition before MACT (Motor Accidents Claims Tribunal) till the date o...