Mumbai ITAT Applies adjustment analogy u/s. 140A regarding tax-payments to ‘refunds’ also; Accepts taxpayer’s Section 244A interest computation

Mumbai ITAT accepts assessee-Bank’s methodology for computation of interest on refund u/s. 244A for AY 1995-96, applying the ratio of co-ordinate bench ruling in Union Bank of India, ITAT directs AO to re-compute interest u/s. 244A by first adjusting the amount of refund already granted towards the interest component and balance to be adjusted towards the tax component;                                                                                     

Coordinate bench had ruled that, “since the statute itself has already prescribed a particular method of adjustment in explanation to Sec. 140A(1) [regarding payment of taxes], then justice, fairness, equity and good conscience demands that same method should be followed while making adjustment for refund of taxes, especially when no contrary provision has been provided.”;                                                                                   

 Notes that in assessee’s case, AO had originally determined refund at Rs. 200 cr. and calculated interest on it at Rs. 57 lakh, however, only a partial refund of Rs. 148 cr. [comprising of tax portion of Rs. 120 cr.] was granted to assessee out of total refund of Rs. 257 cr.;                                                                  Rejects Revenue’s action of segregating the refunds granted into tax portion and interest portion and subsequently reducing the tax portion of the refund alone from the refund originally determined [at Rs. 200 cr], while calculating interest u/s 244A for the subsequent period;                                         ITAT concludes that assessee would be entitled for interest on the unpaid refunds in accordance with the principle laid out by co-ordinate bench.:ITAT