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2015 (3) TMI 646 - ITAT MUMBAIComputation of interest u/s.244A - AO did not allow interest on interest - CIT(A) confirmed the action of the AO - Held that:- When the refund of tax becomes payable as a result of orders passed in appeal or other proceedings under the Act, this refund is to be given along with interest, which is to be calculated as per sec. 244 of the Act. If that interest is paid along with the excess tax, no further payment is to be made. It is only when the excess amount of tax is refunded but the interest is not refunded along therewith, the retention of interest amount would become unjustified and interest on interest would also become payable. The reason is simple. It is the tax which was paid in excess by the assessee which became refundable. The assessee would be compensated by paying interest thereupon. It is only when the interest is not refunded along with excess tax that the withholding of the said interest becomes unjustified and it becomes an amount due" to the assessee on which the assessee can claim further interest. Such a situation has not happened in the present case as the amount of interest is calculated and refunded along with the refundable tax amount. The Hon'ble Supreme Court has made adverse remarks about the decision of Sandvik Asia Ltd. [2006 (1) TMI 55 - SUPREME Court] in the decision of Gujarat Fluoro Chemicals [2012 (8) TMI 740 - SUPREME COURT], wherein held that it is only that interest provided for under the statute which may be claimed by an assessee from the Revenue and no other interest on such statutory interest. Therefore, following Gujarat Floura Chemicals and the decision of Hon'ble Delhi High Court in case of The Motor & General Finance Ltd. vs. CIT [2009 (10) TMI 51 - DELHI HIGH COURT], the stand of the AO is upheld and the grounds of appeal of the appellant are dismissed.
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