Case Law Details
DCIT Vs Honeywell Automation India Ltd (ITAT Pune)
Conclusion: Interest on income-tax refund amounting to Rs.1.18 crore cannot be charged to tax on the processing of return u/s.143(1) during the year under consideration for the raison d’etre that the regular assessment made in the year 2017 resulted into creation of demand and wiping out the refund already granted to the assessee along with recovery of interest.
Held: Assessee was granted refund of Rs.11,47,73,740/- (inclusive of interest component of Rs.1,18,37,651/-) pertaining to the assessment year 2012- 13 on 12-03-2014 in AY 2014-15. During the course of the assessment proceedings, AO observed that interest amounting to Rs.1.18 crore on income tax refund was not offered by assessee for taxation. Assessee submitted that the interest on refund was suo motu adjusted by Revenue against the demand for the assessment year 2009-10 without any intimation to assessee and as such, the factum of receipt of interest on income tax refund was not in its notice. AO remained unconvinced with assessee’s stand point and included the interest on refund granted for the assessment year 2012-13 in the total income for AY 2014-15. CIT(A) deleted this addition. Against this, Revenue preferred appeal before Tribunal. It was held that CIT(A) was justified in holding that interest on income-tax refund amounting to Rs.1.18 crore cannot be charged to tax on the processing of return u/s.143(1) during the year under consideration for the raison d’etre that the regular assessment made in the year 2017 resulted into creation of demand and wiping out the refund already granted to the assessee along with recovery of interest.
FULL TEXT OF THE ORDER OF PUNE DELHI
This appeal by the Revenue emanates from the order passed by the ld. CIT(A) on 31-05-2021 in relation to the A.Y. 2014-15.
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