TMI Blog2010 (1) TMI 896X X X X Extracts X X X X X X X X Extracts X X X X ..... n, JJ. P.K.R. Menon and Jose Joseph for the Appellant A. Kumar for the Respondent JUDGEMENT C.N. Ramachandran Nair, J:- 1. The question raised in the appeal filed by the revenue is whether the Tribunal was justified in holding that respondent-assessee is entitled to interest under section 244A of the Income-tax Act on the refund amount equal to the tax credit given under section 115JAA of the Act. We have heard standing counsel appearing for the appellant-revenue and Sri A. Kumar, counsel appearing for the respondent-assessee. 2. The facts leading to the appeal are the following. The assessment for the assessment year 2002-03 was completed under section 115JAA on book profit and the assessee had remitted tax l ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... this appeal. 3. Standing counsel appearing for the revenue has referred to sub-section (2) of section 115 JAA and contended that under the proviso to the said subsection, no interest could be granted on the tax credit allowed to the assessee under sub-section (1). According to counsel for the revenue, interest referred to therein is the interest payable under section 244A of the Act and so much so the first appellate authority as well as the Tribunal wrongly declared assessee's eligibility for interest on refund of tax credit adjusted under MAT scheme. Counsel for the respondent-assessee on the other hand contended that once tax credit is given the same partakes the character of tax payment along with pre-paid taxes including advance ta ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ion of section 115JAA(1) of the Act. Sub-section (2) of section 115JAA says that tax credit is the difference between the tax payable on book profit, i.e., under section 115JAA(1) and the tax found as payable in the computation of income in accordance with the provisions of the Act. Therefore, what is allowed to be carried over as tax credit is the tax paid on deemed income which but for the specific provision the assessee was not liable to pay. The benefit of carried forward and set off of tax so paid is a benefit available to the assessee by virtue of the specific provision contained in sub-section (2). It was up to the Legislature to deny interest payable under section 244A on tax credit adjustment allowed leading to refund payable to th ..... X X X X Extracts X X X X X X X X Extracts X X X X
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