Refund interest taxability for foreign companies confirmed at the maximum marginal rate under income-tax law.

Interest on income-tax refund under Section 244A arising to a foreign company is taxable at the maximum marginal rate of 40%. The Tribunal followed its coordinate bench decision and the jurisdictional High Court view, treating the issue as already settled and declining to take a different view. The operative position is that such refund interest in the hands of a foreign company is chargeable at the maximum marginal rate.

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Issues: Whether interest on income-tax refund under Section 244A of the Income-tax Act, 1961 earned by a foreign company is chargeable to tax at the maximum marginal rate of 40%.

Analysis: The Tribunal followed its earlier coordinate bench decision, which had relied on the jurisdictional High Court's view that interest on refund under Section 244A arising to a foreign company is taxable at the maximum marginal rate. The issue was treated as already settled and no different view was taken.

Conclusion: The interest on income-tax refund under Section 244A arising to a foreign company is taxable at the maximum marginal rate of 40%.

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