DCIT Vs Sony India Pvt Ltd (ITAT Delhi)
The Income Tax Appellate Tribunal (ITAT), Delhi, dismissed the Revenue’s appeals for Assessment Years 2007-08 and 2008-09 challenging the order of the National Faceless Appeal Centre (NFAC)/CIT(A) concerning the computation of refund and interest under Section 244A of the Income-tax Act, 1961.
The assessee, engaged in the import and distribution of Sony products, had filed its return for AY 2007-08 declaring total income of ₹82,58,38,988 without claiming any refund. During scrutiny assessment, the Assessing Officer disallowed depreciation claimed on software licences. The Tribunal subsequently allowed the depreciation claim, following which the Assessing Officer passed an Order Giving Effect (OGE) dated 06.08.2021 determining a refund of ₹45,12,86,718 and granting a total refund of ₹51,56,72,638, comprising a principal refund of ₹31,97,37,468 and interest of ₹18,95,40,421. While computing the refund, the Assessing Officer adjusted an earlier partial refund first against the principal component and thereafter against the interest component.
The assessee challenged this computation before the CIT(A), who entertained the appeal under Section 246A and held that the earlier partial refund should first be adjusted against the interest refundable up to that date and only thereafter against the principal amount of tax refundable. The Revenue appealed before the Tribunal.
