TMI Blog2018 (4) TMI 713X X X X Extracts X X X X X X X X Extracts X X X X ..... efund is chargeable to tax under the head income from other sources on accrued or receipt basis according to the method of accounting employed by the assessee. Admittedly, the assessee is following the mercantile method of accounting. Therefore, the interest on income tax refund if the revenue has admitted it shall be chargeable to tax as and when it is determined and refund voucher thereof. In the present case the Ld. AO as well as the Ld. CIT (A) has already interest of ₹ 102537/– has been determined and refund voucher is been prepared by the revenue but instead of issuing the cheque same has been adjusted against the outstanding demand of the assessee for assessment year 2004 – 05. In the interest amount has already accrued to ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... position of law that interest u/s 244 (1A) accrues to the appellant only when it is granted to the assessee along with refund order u/s 240 of the act, and addition of ₹ 1025237/- has been sustained towards interest on income tax refund inspite of non issue of any order granting the refund. 2. The assessee is a company engaged in the business meant of procurement of storage, movement, and distribution of food graisn as per the guidelines of the government of India. The assessee filed its return of income on 28/9/2011 declaring total income of Nil. The return was further revised on 22/3/2013 declaring total income of Rs. Nil. During assessment proceedings the ld AO found that the ITS report in the case of the assessee revealed th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 54 of the income tax act. The interest was reduced by a sum of ₹ 213420/ on account of withdrawal of interest under section 244A of the income tax act. Therefore net interest income was determined at ₹ 1054234/- by the Ld. AO that the amount was further adjusted against the demand for assessment year 2004 05 on 01/3/2011. Therefore, the Ld. CIT (A) reduced the addition of ₹ 1025237/ because of interest on income tax refund. The assessee aggrieved with the order of the Ld. CIT (A) has preferred an appeal before us. 4. The Ld. authorized representative submitted the same contention before us and no refund has been received by the assessee. It was further stated that that letter dated 13/12/2013 submitted to the assess ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... eal has correctly confirmed the addition of ₹ 1 025237/ because of interest received from income tax Department. 6. We have carefully considered the rival contentions. We have also per used the orders of the lower authorities. The facts emerging out of the orders shows that assessee was granted refund of ₹ 9 839550/ which is comprising of income tax refund of ₹ 8 785390/ and interest thereon of ₹ 1 025237/ which was adjusted against the demand for assessment year 2004 05 on 1/3/2011. Therefore, the claim of the assessee that it has not received any refund is devoid of any merit as the refund was not issued by issue of cheque to the assessee but was adjusted against the outstanding demand for assessment year ..... X X X X Extracts X X X X X X X X Extracts X X X X
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