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2017 (1) TMI 1402 - ITAT CHENNAIInterest u/s. 244A - adjustment of a part refund/s comprising tax and interest - amount reckoned where the entire sum of tax and interest (u/s. 244A) thereon (up to the date of grant of refund) is not paid in full, but is granted in part - Held that:- The various amounts paid by and refunded to the assessee would therefore require being adjusted as under: (i) each payment, other than of TDS, TCS and Advance-tax, is to be adjusted first against interest due to date, and only the balance against tax (Explanation to s. 140A); (ii) each refund of tax, in-as-much as it is compensatory, shall be subject to interest u/s. 244A for the period up to the date of its grant; (iii) each refund is to bear principal and interest u/s. 244A thereon to date (of grant of refund), i.e., proportionately, and there can be no mismatch between the two. The component of each can be determined by considering the refund amount as a gross amount comprising the two constituents in the same ratio (see Option C). Further, in view of the decision by the Apex Court in H.E.G. Ltd. (2009 (12) TMI 35 - SUPREME COURT ), relied upon by the ld. CIT(A), refund (withdrawal) of interest u/ss. 234A, 234B, 234C, etc., being in consequence to a tax default, partakes the character of ‘tax’ and, therefore, shall also carry compensatory interest u/s. 244A, to be allowed on the same basis and in the same manner as on the refund of tax proper.
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