https://www.taxtmi.com/caselaws?id=758044 ITAT Mumbai held that when computing interest under section 244A, refunds must be adjusted first against interest payable and then against principal tax amount. The Revenue's contention that this constitutes compound interest was rejected. The tribunal found the AO incorrectly adjusted refunds by reducing interest only to the extent determined at earlier refund issuance, leading to larger adjustment towards tax component. Following coordinate bench precedents and applying the same principle used in tax collection to refund grants, the tribunal directed the AO to recompute interest under section 244A per the assessee's detailed working. Appeal allowed. en-us Fri, 30 Aug 2024 00:00:00 +0530 Fri, 06 Sep 2024 08:22:05 +0530 TaxTMI RSS Generator https://www.taxtmi.com/caselaws?id=758044 ITAT Mumbai held that when computing interest under section 244A, refunds must be adjusted first against interest payable and then against principal tax amount. The Revenue's contention that this constitutes compound interest was rejected. The tribunal found the AO incorrectly adjusted refunds by reducing interest only to the extent determined at earlier refund issuance, leading to larger adjustment towards tax component. Following coordinate bench precedents and applying the same principle used in tax collection to refund grants, the tribunal directed the AO to recompute interest under section 244A per the assessee's detailed working. Appeal allowed. Case-Laws Income Tax Fri, 30 Aug 2024 00:00:00 +0530 https://www.taxtmi.com/caselaws?id=758044