Lal Nathirmal Moolchandani Vs ITO (ITAT Mumbai)
We find that the assessee has received an interest on refund for assessment year 2009-10 in the present assessment year on 31.03.2011. The said cheque was encashed subsequently. Subsequently, vide assessment order passed u/s. 143(3) on 08.12.2011 for the same assessment year a total demand of Rs.24,67,560/- was raised which included the refund granted earlier. Thus, the refund granted earlier stood withdrawn. Hence, the assessee’s claim is that the interest of Rs.1,57,692/- which was received during the financial year 2011-12, was withdrawn by the Assessing Officer in financial year 2011-12 itself. We find that there is considerable cogency in the submission of the assessee and the interest on refund granted was withdrawn when the demand of Rs.24,67,560/- was raised for the same assessment year subsequently. Hence, when the income stood withdrawn there is no question of the assessee offering the same as income. We find that this view also gets support from the ITAT decision in the case of Assistant Director of Income-tax, (International Taxation) – 1(1), Mumbai vs. Credit Agricole Indosuez [2013] 33 taxmann.com 441 (Mum-Trib). In this case, it was expounded that only that much interest u/s. 244A can be brought to tax which is finally determined on assessment. In the present case, in the final assessment huge demand has been raised and there was no question of assessment of any interest income. Hence, in the background of the aforesaid discussion and precedent, we set aside the orders of the authorities below and delete the addition.
