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2015 (2) TMI 453 - HC - Income TaxInterest on refund - principles for awarding compensation - Held that:- From the conjoint reading of the decision of Sandvik Asia Limited Vs. Commissioner of Income Tax & Others ( 2006 (1) TMI 55 - SUPREME Court) and the latter decision of the Larger Bench in the case of Commissioner of Income Tax, Gujarat Vs. Gujarat Fluoro Chemicals (2013 (10) TMI 117 - SUPREME COURT) it appears that the liability to pay interest on interest by the Revenue is not approved and to that extent the contention of the Revenue can be maintained. But the further contention of the Revenue that no interest whatsoever would be payable if the refund of the amount of tax or refund of the amount deposited towards tax is to be made, no interest whatsoever would be available by way of compensatory measure. The general principles for awarding compensation to the Assessee for the delay in receiving monies properly due to it is not disapproved by the Larger Bench of the Apex Court in the case of Commissioner of Income Tax, Gujarat Vs. Gujarat Fluoro Chemicals (supra). Thus the petitioner - Assessee would be entitled to compensation and the interest can be awarded by way of compensation, but would not be entitled to further compensation by way of interest on such interest, which is awarded as compensation. Respondents are directed to grant compensation by way of interest at the rate of 9% p.a., to the petitioner on the amount refunded for the period from July 1, 1987 to November 13, 1990. - Decided in favour of assessee.
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