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Thursday, February 13, 2014

Interest on Income Tax refund should be spread over the years for which interest is granted

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High Court of Andhra Pradesh
Shri M. Jaffer Saheb (Decd.)
Commissioner of Income-Tax
R.C. No.127 OF 1997
Date – 19th December, 2013

The Andhra Pradesh HC has held in the case Shri M. Jaffer Saheb (Decd.)Vs. CIT  that interest granted under Section 244A of the Act on income taxrefund is chargeable to tax on accrual basis and has to be spread over the respective years for which interest is being granted. Accordingly, the entire interest on income tax refund cannot be taxed in the year in which order of the ITAT is passed.

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