TMI Blog2015 (2) TMI 152X X X X Extracts X X X X X X X X Extracts X X X X ..... termined by the AO is lower than the amount the assessee is entitled for. 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. - Decided in favour of assessee for statistical purposes. - ITA No. 5431/Mum/2013 ITA No. 5432/Mum/2013 ITA No. 5433/Mum/2013 ITA No. 5434/Mum/2013 ITA No. 5435/Mum/2013 - - - Dated:- 31-12-2014 - Shri R. C. Sharma And Shri Sanjay Garg,JJ. For the Petitioner : Shri Madhur Agrawal For the Respondent : Shri Narendra Kumar Chand ORDER Per R. C. Sharma,AM: These are appeals filed by the assessee against the order of CIT(A) for the assessm ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tled to. 4. Ld. AR further contended that the refund granted should be reduced from tax interest separately. The assessee relies upon the provision of sec 244A(3) and the decision of ITAT - Mumbai in the case of Abu Dhabi Commercial Bank Ltd for A. Yrs. 1995-96 to 2000-2001, reported in 138 ITD 83, which is based on decision in A. Yr. 1990-91 in the case. 5. At the outset, Ld. AR placed on record the order of the Co-ordinate Bench in the case of Abu-Dhabi Commercial Bank Ltd in ITA No. 5136/Mum/2009, order dated 2nd July 2010, (138 ITD 83), and it was contended that similar issue has been decided by the Tribunal and the matter was restored to the AO for calculating interest due to the assessee without reducing the interest u/s 244A, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the AO has reduced total refund granted including interest u/s 244A already granted, from the tax refund due to the assessee and thereby computed interest on the remaining amount, whereas, contention of Ld. AR was that only refund already granted is to be reduced and not the interest on such refund. We find that exactly same issue was considered by Coordinate Bench in the case of Abu Dhabi Commercial Bank Ltd. (supra). Relevant observation and conclusion of the Bench was as under: 2. The only issue raised before us in this appeal is whether the CIT (A) is justified in upholding the method adopted by the AO for calculating the interest u/s 244A of the Act by reducing the refund inclusion of the interest already granted from the tax refun ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he refund of interest already granted. Thus, the ld. AR of the assessee has referred the interest calculated by the AO at ₹ 31,29,172/- wherein the AO has reduced the amount of refund included the interest u/s 244A already granted from the refund due to the assessee and then the interest was calculated. He has referred the calculation of interest in assessee s own working and submitted that if the interest is calculated on the tax refund excluding the interest already granted, the assessee is entitled for further refund of ₹ 11,89,050/- being the difference of actual interest of ₹ 43,18,221/- and ₹ 31,29,171/- being calculated by the AO. He has also referred the order of the CIT(A) and submitted that the CIT(A) has d ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... efund of tax as well interest granted u/s 244A from the refund due to the assessees. In order to compute the interest u/s 244A, the amount of balance refund due to the assessee has to be determined after deducting the amount of tax already refunded and not amount of interest already granted u/s 244A. Thus the interest component in the refund already granted should be excluded while the same is to be reduced from the refund due to the assessee for the purposes of section 244A for future interest on the balance refund due amount. Accordingly, we are of the view that the method adopted by the AO suffered from grave error as the same has resulted the reduction of interest payable to the assessee because the principal amount is reduced by intere ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ide this issue in favour of the assessee and direct the AO to calculate the interest on the refund due to the assessee without reducing the interest under section 244A which is part of the refund earlier granted from the refund due . 10. We have gone through the orders of the authorities below and deliberated on the case law cited at bar. From the record we found that while computing the amount on which interest under section 244A is to be paid, the Assessing Officer has reduced the total refund granted (comprising of refund of tax as well interest granted under section 244A) from the tax refund due to the assessee. This has resulted in the AO determining a reduced principal amount of tax refund on which the interest under section 244A i ..... X X X X Extracts X X X X X X X X Extracts X X X X
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