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TMI Blog2015 (2) TMI 152X X X X Extracts X X X X X X X X Extracts X X X X ..... eferred to as the CIT(A)] erred in upholding the method adopted by the AO of calculating interest under Section 244A of the Income Tax Act, 1961 (the Act) by reducing the total refund granted (including the interest under section 244A already granted) from the tax refund due to the appellant and computing interest on the remaining amount. 2. The CIT(A) erred in stating that if the tax refund granted earlier is adjusted against tax due and the interest under section 244A granted earlier is adjusted against the interest under section 244A due it will amount to interest on interest. The appellants crave leave to add to, amend, alter, vary, omit or substitute the aforesaid grounds of appeal or add a new ground or grounds of appeal at any time ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... owing: Sr. No. Citation Case Law 1 361 ITR 424 CIT vs Brakes India Ltd 2 358 ITR 291 CIT vs Gujarat Fluoro Chemicals 3 348 ITR 319 CIT vs Gujarat Flouro Chemicals 4 23 Taxman 359 Abu Dhabi Commercial Bank Ltd. 7. As per Ld. DR the computation of interest allowed by the AO and claimed by the assessee are part of the appeal record. Our attention was also invited to such computation, copies which were placed on record. On perusal and comparison of the two reveals that the AO has worked out stage wise interest considering refund granted from time to time. The AO has given simple interest at applicable rate. There is no mistake in allowing of simple interest. On the other hand excluding interest separately, as claimed by asses ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s issue of calculation of interest on the tax refund by reducing the refund tax and not interest already granted. The assessee submitted before the AO that the interest part already granted should not be reduced from the tax refund due and interest would be paid on the balance refund. The AO, vide order dated 26.08.2008 passed under section 154 was of the view that there is no mistake in calculation of interest on ref und u/s 244A. 4. The CIT(A) also held that the method adopted by the AO is as per the provisions of Act and cannot be faulted with, therefore, the CIT(A) dismissed the appeal of the assessee vide impugned order. 5. Before us, the learned AR of the assessee has submitted that while calculating the interest by the AO u/s 244A, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ent method adopted by the AO . The assessee also filed a copy of the details of working of interest on refund filed before the CIT (A) in support of its contention. 6. On the other hand, the learned DR has submitted that the interest u/s 244A is calculated on the final determination of the refund and whatever refund has already granted and paid to the assessee are required to be reduced from the refund due to the assessees. He has relied upon the orders of the authorities below. 7. We have considered the rival contentions and relevant record. It is evident from the orders of the lower authorities that the AO has calculated the interest u/s 244A by reducing the refund of tax already granted to the assessee. In the amount of refund the inte ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... doe to the assessee for computation of interest u/s 244A. W e note that the CIT(A) has decided the issue in para 2.2 of the impugned order as under : "2.2 I have considered the appellant's request and examined the facts. In view of the facts above, I find that the issue relates to calculation method adopted by the department and assessee. It is seen that method adopted by the AO is being consistently followed in respect of all assessee's Therefore, I am of the view that method adopted by the AO as per provisos of the Act cannot be faulted. I therefore, inclined to agree with the computation method adopted by the AO. Accordingly, the ground under appeal is dismissed" 8. From the above it is clear that the CIT(A) has not gone into the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... omputation of interest under section 244A of the Act, the decisions of the Tribunal in the case of Abu Dhabi Commercial Bank Limited v DCIT (supra) completely covers this issue. 11. At the outset, we found that the CIT(A) has not gone into the question of correctness of method adopted by the AO but decided the issue on the ground that the method adopted by the AO is being consistently followed in respect of the assessee. Therefore, the impugned order of the CIT(A) qua this issue is not sustainable in law and liable to be set aside. We accordingly restore the matter to the AO with a direction to calculate interest due to the assessee without reducing the interest u/s 244A, which is part of the refund earlier granted from the refund due. 12 ..... X X X X Extracts X X X X X X X X Extracts X X X X
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