2018 (4) TMI 713

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....5237/- to the returned income of the appellant towards interest on income tax refund determined and adjusted against the outstanding demand of an earlier year without issuing any order, notice or communication of such determination and adjustment of the appellant. 2. That on the facts and in the circumstances of the case, the learned Commissioner of Income-tax (Appeals) has erred in law in not appreciating the correct proposition 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 Rs. 1025237/- has been sustained towards interest on income tax refund inspite of non issue of any order granting the refund." 2. The assessee is....

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....rieved with the order of the Ld. assessing officer preferred an appeal before the Ld. CIT (A). The Ld. CIT (A) on perusal of the records and after obtaining the remand report decided the issue. Undisputedly Assessee Company was granted income tax refund of Rs. 9839550/- which included interest amounting to Rs. 2277965/- which was modified to Rs. 1267657/- vide order dated 15/2/2011 under section 154 of the income tax act. The interest was reduced by a sum of Rs. 213420/- on account of withdrawal of interest under section 244A of the income tax act. Therefore net interest income was determined at Rs. 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. ....

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....ubmitted that the claim of the assessee that the assessee has not received it is not correct. It was stated that income tax Department has not claimed that the above refund amount has been paid to the assessee but has been stated that it has been adjusted against the outstanding demand of the assessee for assessment year 2004 - 05. Therefore it is submitted that the Ld. CIT appeal has correctly confirmed the addition of Rs. 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 Rs. 9 839550/- which is comprising of income tax refund of....