Whether the interest accrued on fixed deposits in a bank would be entitled for TDS in the hands of the assessee, even if entitlement in respect of the principal amount of fixed deposit as well as the interest earned is subject matter of appeal?
it would be wholly unreasonable to deduct tax at source on an amount which has not accrued to the Petitioner as income during the financial year in question, the entitlement of the Petitioner being contingent on the outcome of the challenge to the arbitral award.
Moreover, it has also not been disputed on behalf of the Petitioner and it is fairly conceded by Counsel for the Petitioner that if the challenge to the arbitral award ends in favour of the Petitioner, the Revenue would be entitled to bring to tax the amount accrued in the corresponding year. We accordingly make the rule absolute by directing the First Respondent to issue a certificate under Section 197 for financial year 2012-13.
