TMI Blog2005 (7) TMI 536X X X X Extracts X X X X X X X X Extracts X X X X ..... from 1-4-1994 the date of the refund i.e., December 31, 1997. 4. The CIT(A) has erred in holding that on the finalisation of the judgment of the Supreme Court dated February 17, 1995 it was incumbent upon the appellant to have returned all the money to the Appropriate Authority immediately and in that event only the appellant could have said that the sum amounting to Rs. 3,50,00,000 paid as tax should be adjusted as payment to the Central Government. 5. The CIT(A) has erred in holding that the amount of Rs. 3,50,00,000 paid by way of advance tax in March 1994 could not be treated as a payment of advance-tax after the decision of the Supreme Court. 6. The CIT(A) has erred in holding that the payment of Rs. 3,50,00,000 made by the appellant ceased to be a payment of tax after the judgment of the Supreme Court and the amount received from the Appropriate Authority ought to have been repaid by the appellant to the Appropriate Authority in spite of the directions to the contrary of the Supreme Court." 2. Thus the main question in this appeal is that whether the assessee is entitled to interest under section 244A on the sum of Rs. 3.5 crores paid by it in March 1994 as advanc ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Estate of Late Mr. Dinshah J. Gazdar Pan : 34-007-PN-0401 GIR No. AC-Cir-13(3)/31-D, assessment year 1994-95 Sub : Set off refund against advance-tax liability for assessment year 1996-97 - request for. Under instructions from the Executors of the Estate of late Mr. Dinshah J. Gazdar we refer to the return of income filed by them on October 24, 1994 vide receipt No. 004567 and the revised return filed by them on July 18, 1995 vide receipt No. 004867. In the original return filed on October 24, 1994 our clients had returned capital gains on the transfer of Modi Bungalow arising out of the pre-emptive purchase thereof by the Central Government through the Appropriate Authority constituted under Chapter - XXC of the Income-tax Act, 1961. Subsequently, however, on the matter being agitated by the intending purchaser the Supreme Court has held the Acquisition Order under section 269UD(1) of the Income-tax Act, 1961 to be void and consequently the property has re-vested in the hands of the executors. Under the circumstances, the long-term capital gains stood revised to Rs. 1,21,189 and consequentially our clients ar ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed under section 143(1)( a ) on 24-12-1996 and the refund of Rs. 10,20,982 was worked out. Credit of prepaid taxes of Rs. 3,52,21,985 was also given before working out refund. On 18-7-1995 the revised return for the assessment year 1994-95 was filed withdrawing capital gains and offering income of Rs. 8,27,956 only. The said return was also processed on 8-1-1997. Since this return was not treated as a valid revised return, rectification under section 154 was carried out on 8-10-1997 cancelling the processing made on 8-1-1997. The sale of the house property was subsequently shown in the return for assessment year 1996-97 filed on 29-6-1996 wherein total income declared was Rs. 15,18,72,835. The assessee had requested to adjust the tax paid and the refund arising for assessment year 1994-95 against self assessment tax for assessment year 1996-97. The said return was processed under section 143(1)( a ) on 3-9-1997. Interest under sections 234B and 234C was also charged for the assessment year 1996-97. The Assessing Officer agreed for issuing refund to the assessee under section 237 for the assessment year 1994-95 in respect of excess tax paid in that year but did not accept request of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... amount becomes due to the assessee under this Act, he shall, subject to the provisions of this section, be entitled to receive, in addition to the said amount, simple interest thereon calculated in the following manner, namely : ( a )where the refund is out of any tax collected at source under section 206C or paid by way of advance tax or treated as paid under section 199, during the financial year immediately preceding the assessment year, such interest shall be calculated at the rate of one per cent for every month or part of a month comprised in the period from the 1st day of April of the assessment year to the date on which the refund is granted : Provided that no interest shall be payable if the amount of refund is less than ten per cent of the tax as determined under sub-section (1) of section 143 or on regular assessment; ( b )in any other case, such interest shall be calculated at the rate of one per cent for every month or part of a month comprised in the period or periods from the date or, as the case may be, dates of payment of the tax or penalty to the date on which the refund is granted. Explanation For the purposes of this clause, date of payment of ta ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tax will be adjusted against such final determination of taxes. The argument that assessee had no intention to pay back to the Appropriate Authority is of no consequence on the grant of interest as it is only an extraneous consideration. The reasons advanced by the Assessing Officer are also irrelevant because interest has to be paid under section 244A on the refund worked out. The working of refund under section 237 is only the half work done. The determination of interest has to be done only under section 244A, which will complete the work of the Assessing Officer for which he is statutorily bound. Similarly, CIT(A) is also in error in holding that assessee has played a fraud on Central Government. There is no material on record to come to this conclusion. It is also not material as to whether interest under sections 234A 234B 234C is paid by the assessee in the assessment year 1996-97. Any omission or commission by the Assessing Officer in the assessment year 1996-97 will not disentitle the assessee from its right arising in the assessment year 1994-95. We are also of the view that for entitlement of interest under section 244A it is immaterial as to from which source advance- ..... X X X X Extracts X X X X X X X X Extracts X X X X
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