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2016 (5) TMI 945 - MADRAS HIGH COURTInterest payable on the refund of income tax under Section 244-A - whether falls within the definition of the term interest under Article 12.4 of the Double Taxation Avoidance Agreement or not? - Held that:- Subsection (1) of Section 244-A uses two important expressions, namely (i) becomes due, and (ii) be entitled to. The expression "becomes due" is a clear indication that an assessee will be entitled to the benefit of Section 244-A only if the refund of any amount has become due. If a refund has become due, interest on the refund is also automatic subject to the satisfaction of other conditions. Anything that is due and which a person is entitled to collect, is naturally in the nature of a debt claim. Therefore, we do not think that the Supreme Court made a very stray observation in paragraph 38 of its decision in Tata Chemicals, without realising what they were actually indicating. The statement found in paragraph 38 of the decision in Tata Chemicals to the effect "refund due and payable to the assessee is debtowed payable by the revenue" is actually a perfect statement of law. It is certainly a theorem, but not Euclid's theorem. Therefore, the law as we see is well settled to the effect that what was due as a refund and what was payable as interest on such refund are debt claims within the meaning of Article 12.4. As a consequence, they satisfy the parameters of Article 12.3(a).- Decided in favour of the assessee.
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