TaxTMI 
TaxTMI 
2011 (5) TMI 1102
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....ce. Int. Tax Appeal No. 04/Mum/2010 (A.Y. 1999-2000) 2. The grounds raised by the assessee are as under:- "1. The learned CIT(A) erred in not granting interest u/s 244A of the income Tax read with section 21 of Interest Tax Act on the ground that there was no wrongful withholding of refund or undue delay in giving effect to appellate orders and hence the ratio of Apex Court in the case of Sandvik Asia Ltd. vs. CIT (280 ITR 643) is not applicable. 2. The CIT(A) failed to appreciate that huge quantum of refunds had become due, consequent on favorable appellate orders dismissing high pitched assessment orders made on erroneous view of facts and law and hence such a withholding of refund is squarely covered as an unjustifiable demand ....
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....the assessee by holding as under:- "2.2: I have considered the submission of the ld. Counsel and it is seen that the Assessing Officer has given appeal effect to the order of Hon'ble ITAT dtd. 27.2.2007 ITA No. 61/Mum/2004 on 15.10.2007 and therefore, the Assessing Officer is directed to grant interest u/s 244A upto the date of issue of refund and re-compute the interest calculation accordingly. 3. As regards, the contention of the ld. Counsel that as per the decision of the Hon'ble Supreme Court of India in the case of Sandvik Asia Ltd. v. CIT 289 ITR 643, the payment of interest on interest does not arise in this case. There has been no undue delay or default in giving the appeal effect to the appellant and therefore, the appellant ....
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.... the said decision, the Hon'ble Supreme Court has further held that "interest is payment on the amount to be refunded u/s 244(1) within three months from the decision of the appellate or other authority specified in section 240. The expression "amount" in the earlier part of section 244(1A) refers not only to the tax but also to the interest; it is a neutral expression and it cannot be limited to the tax paid in pursuance of the order of assessment". The Hon'ble Supreme Court has further held that "even assuming that there is no provision for payment of compensation, compensation for delay is required to be paid as the Act itself recognizes in principle the liability of the department to pay interest when excess tax was retained and the sam....