RAYMOND LTD,MUMBAI vs. DCIT RG 2(3), MUMBAI

ITA Nos. 8641 & 8642/Mum/2011 A.Ys. 1999-2000 & 2000-01 1 Raymond Limited Vs. The Deputy Commissioner of Income Tax-2(3) IN THE INCOME TAX APPELLATE TRIBUNAL “D” BENCH, MUMBAI BEFORE SHRI AMARJIT SINGH, ACCOUNTANT MEMBER & SHRI SANDEEP SINGH KARHAIL, JUDICIAL MEMBER ITA Nos. 8641 & 8642/Mum/2011 (A.Ys. 1999-2000 & 2000-01) Raymond Limited, Vs. The DCIT-2(3) New Hind House, Aayakar Bhavan, Narottam Morarjee Marg, M.K. Road, Ballard Estate, Mumbai – 400 020 Mumbai – 400 001 स्थायी लेखा सं./ जीआइआर सं./ PAN/GIR No: AAACR4896A Assessee .. Revenue

Assessee by : Nitesh Joshi Revenue by : Shri T. Shankar

Date of Hearing 29.04.2022 Date of Pronouncement 15.06.2022 आदेश / O R D E R PER AMERJIT SINGH (AM): The present appeals filed by the assessee are directed against the order passed by the ld. CIT(A)-6, Mumbai. We shall take ITA No. 8641/Mum/2011 as a lead case and its finding will be applied to the other case. The assessee has raised the following grounds of appeal: “1.(a) The learned Commissioner of Income tax (Appeals) erred in not adjudicating the Ground No. 1(a) with respect to the action of the learned Deputy Commissioner of Income Tax, 2(3), Mumbai (hereinafter referred to as “the Assessing Officer‟) in working out the disallowances of a sum of Rs.6,01,99,000/as per provisions of section 14A read with Rule 8D of the Income Tax Rules, 1962 (the Rules).

ITA Nos. 8641 & 8642/Mum/2011 A.Ys. 1999-2000 & 2000-01 2 Raymond Limited Vs. The Deputy Commissioner of Income Tax-2(3)

(b) The appellant submits that the learned Commissioner of Income-tax (Appeals) ought to have held that section 14A(2) and 14A(3) were introduced by the Finance Act, 2007 with effect from 01/04/2007 and Rule 8D was introduced vide Notification dated 24/03/2008 and cannot be applied in determining the taxable income for the assessment year under appeal. (c) Without prejudice to what is stated above, the appellant submits learned Commissioner of Income-tax (Appeals) erred in not adjudicating Ground No. 1(b) with respect to the action of the Assessing Officer in considering gross interest expenses as against net interest expenses while working out the proportionate disallowance of interest expenses, as per the provisions of section 14A of the Act read with Rule 8D of the Rules. (d) Without prejudice to what is stated above, the appellant submits learned Commissioner of Income-tax (Appeals) erred in not adjudicating Ground No. 1(c) with respect to the action of the Assessing Officer in not reducing the amount of miscellaneous expenditure to the extent not written off or adjusted from total assets while disallowing the proportionate interest expenses as per the provisions of section 14A of the Act read with Rule 8D of the Rules. (e) Without prejudice to what is stated above, the appellant submits learned Commissioner of Income-tax (Appeals) erred in not adjudicating Ground No. 1(d) with respect to the action of the Assessing Officer in not excluding accumulated depreciation and amortization for working out total assets as appearing in the balance sheet on the first day and last day of the previous year while disallowing the proportionate interest expenses as per the provisions of section 14A of the Act read with Rule 8D of the Rules. 2. The learned Commissioner of Income tax (Appeals) erred in not adjudication Gr. No. 2 with respect to the action of the Assessing Officer considering total turnover including taxes duties as against total turnover excluding taxes and duties while working out deduction under section 80HHC from the book profit. 3.(a) The learned Commissioner of Income tax (Appeals) erred in upholding the action of the Assessing Officer in not granting interest under section 244A(1)(b) of the Income Tax Act, 1961 (the Act) on self-assessment tax paid, by relying on the orders of the Commissioner of Income-tax (Appeals) -6, Mumbai dated 30/09/2011 for assessment years 1994-95, 1995-96 and 1998-99, on the ground that even though the advance tax and TDS was more than the tax payable on returned income the appellant had paid self-assessment tax which is in violation of the provisions of section 140A of the Income Tax Act, 1961 (the Act) and the appellant is not entitled to interest on amount of refund due out of excess self-assessment tax paid. (b) The learned CIT(A) erred in holding that there is no express provision to provide interest on self-assessment tax paid and accordingly no interest can be paid on the same. The appellant submits that section 244A(1)(b) of the Act, clearly provides for payment of interest in “other cases” and ITA Nos. 8641 & 8642/Mum/2011 A.Ys. 1999-2000 & 2000-01 3 Raymond Limited Vs. The Deputy Commissioner of Income Tax-2(3)

hence, interest on refund on account of self assessment tax ought to be granted. (c) The learned Commissioner of Income-tax (Appeals) erred in holding that the appellant is not entitled to any interest on amounts paid either by mistake or to earn more interest. The appellant submits that the self- assessment tax were paid much before filing of return of income only to save potential interest liability under section 234B of the Act as actual tax liability is only known at the time near to filing of tax return. The appellant submits that reasoning of the learned Commissioner of Income tax (Appeals) that no interest can be granted for the period of delay for reasons attributable to the appellant is misplaced as this would apply to cases where an assessee is instrumental in delaying the refund process which is not so in appellant‟s case. 4. The learned Commissioner of Income-tax (Appeals) erred in upholding the action of the Assessing Officer in not granting interest under section 244A, by relying on the orders of the Commissioner of Income-tax (Appeals) -6, Mumbai dated 30/09/2011 for assessment years 1994-95, 1995-96 and 1998-99, on the refund amount that falls due which is determined at each stage from the date when the refund amount become due till the date when the refund order is granted and accordingly erred in treating it as granting interest on interest. 5. The learned Commissioner of Income-tax (Appeals) erred in rejecting the without prejudice claim of the appellant that the refund amount granted to the appellant ought to be adjusted against interest receivable first as against the principle. 6. The appellant submits that the Assessing Officer be directed : i.(a) to delete the disallowance of a sum of Rs.6,01,99,000/as per provisions of section 14A of the Act read with rule 8D of the Rules; (b) without prejudice to what is stated above, to consider the net interest expenses as against gross interest while working out the proportionate disallowance of interest expenses, as per the provisions of section 14A of the Act read with Rule 8D of the Rules; (c) without prejudice to what is stated above, to reduce the amount of miscellaneous expenditure to the extent not written off or adjusted from the amount of total asset while disallowing the proportionate interest expenses as per the provisions of section 14A read with rule 8D of the Rules, (d) without prejudice to what is stated above, to exclude the amount of accumulated depreciation and amortization to arrive at average of total assets while disallowing the proportionate interest expenses as per the provisions of section 14A of the Act read with Rule 8D of the Rule; ii. to consider total turnover excluding taxes and duties while computing deduction under section 80HHC from book profit.

ITA Nos. 8641 & 8642/Mum/2011 A.Ys. 1999-2000 & 2000-01 4 Raymond Limited Vs. The Deputy Commissioner of Income Tax-2(3) iii. to grant interest under section 244A(1)(b) on the amount of refund due on excess self assessment tax paid; iv. to grant interest under section 244A on the entire refund amount receivable till the refund is received; v. without prejudice to the above grounds to adjust refund against the interest amount first as against principle amount of refund; and to modify the order in accordance with the provisions of the Act.” 2. The fact in brief is that return of income declaring total income at Rs.nil was filed on 29.11.1999. The assessee had shown income u/s 115JA of the Act at Rs.85,39,65,497/- and 30% of the book profit was determined at Rs.19,61,89,649/-. The assessment u/s 143(3) of the Act was finalized on 14.03.2002 and 30% of book profit us 115JA of the Act was determined at Rs.29,49,71,442/-. The ld.CIT(A) has disposed off the appeal after allowing certain relief and upholding certain disallowance. The ITAT, Mumbai has disposed off the appeal of the assessee vide order dated 01.05.2009. The assessing officer passed order giving effect to the order of the ITAT on 03.06.2010 as per which income u/s 115JA 30% of book profit was determined at Rs.17,91,45,089/-. 3. The assessee filed the appeal before the ld. CIT(A). The ld. CIT(A) has dismissed the appeal of the assessee vide order dated 13.07.2010. The further relevant fact of the case are discussed while adjudicating the different ground of appeal of the assessee as under: Ground No. 1(a) to 1(e) 4. During the course of assessment the A.O noticed that assessee had claimed dividend income of Rs.32,39,930/- as exempt income u/s 10(33) of the Act, out of total dividend income of Rs.99,97,056/-. The assessee claimed that such dividend income was earned from investment made in the share capital of its own subsidiary companies in the earlier years out of its own funds and no interest expenditure had been incurred.

ITA Nos. 8641 & 8642/Mum/2011 A.Ys. 1999-2000 & 2000-01 5 Raymond Limited Vs. The Deputy Commissioner of Income Tax-2(3) However, the A.O was of the view that investment in the shares of subsidiaries companies were made out of funds which included the borrowed funds, therefore, the A.O has allocated interest expenditure on average cost basis to the amount of Rs.6,62,50,000/- towards expenditure incurred for earning exempt income. However, the ld. CIT(A) has dismissed the appeal of the assessee. 5. During the course of appellate proceedings at the outset the ld. counsel furnished a copy of the ITAT order vide ITA No. 104/Mum/2017 dated 05.01.2022, wherein on identical issue on similar facts, the disallowance was restricted to 2% of the exempt income. On the other hand, the ld. D.R placed reliance on the order of lower authorities. 6. Without reiterating the facts as stated above with the assistance of ld. representatives we have gone through the decision of the coordinate bench as supra and observed that after following the decision of the Hon’ble Bombay High Court in the case of Godrej & Boyce Manufacturing Company Ltd. (328 ITR 81) (Bom) and the decision of the Hon’ble Supreme Court in the case of CIT Vs. Essar Technology Ltd. (401 ITR 445) holding that the Rule 8D is prospective in operation and could not have been applied in any assessment year prior to assessment year 2008-09. In the case of the assessee on the basis of disallowance made in the earlier year the disallowance to the extent of 2% of the exempt income was held to be reasonable. The relevant part operating para of the decision of ITAT order as supra for assessment year 2006-07 is reproduced as under: “5. On appraisal of the above mentioned finding, we noticed that the CI (A) has decided the matter of controversy on the basis of the guidelines of Hon'ble

ITA Nos. 8641 & 8642/Mum/2011 A.Ys. 1999-2000 & 2000-01 6 Raymond Limited Vs. The Deputy Commissioner of Income Tax-2(3) Bombay High Court in the case of Godrej & Boyce Mfg. Co. Ltd. Vs. DCIT, reported in (2010) 328 ITR 81 (Bom). The assessee has suo-moto disallowed the expenditure to earn the exempt income to the tune of Rs.86.28 lacs which was more than 2°o of the exempt income. The CIT(A) has assessed the expenditure to earn the exempt income on reasonable basis. The assessment year of the assessee is 2006-07 in which the strict applicability of the rule of Section 14A r.w. Rule 8D is not applicable. The AO nowhere justified the restriction to the extent of 10% of the exempt income. Anyhow, the CIT(A) has decided the matter of controversy judiciously and correctly specifically in view of the guidelines of Hon„ble Bombay High Court in case of Godrej & Boyce Mfg. Co. Ltd. Vs. DCIT, reported in (2010) 328 ITR 81 (Bom), therefore, the order under appeal is not liable to be interfered with at this appellate stage. Accordingly, we affirm the finding of the CIT(A) on this issue and decide all the issues in favour of the assessee against the revenue.” 7. Following the decision of the ITAT in the earlier years in the case of the assessee itself as discussed supra, we direct the A.O to restrict the disallowance u/s 14A to 2% of the exempt income earned by the assessee during the year under consideration. Therefore, ground no. 1(a) to 1(e) of assessee are partly allowed.

Ground No. 2 (considering total turnover including taxes duties as against total turnover excluding taxes and duties while working out deduction u/s 80HHC from the book profit) 8. Heard both the sides and perused the material on record. This ground of appeal has not been adjudicated by the ld. CIT(A) in spite of the fact that as per Form No. 35 ground of appeal (v) the assessee has raised this ground of appeal. Therefore we restore this ground of appeal to the file of the ld. CIT(A) for deciding on merit after affording due opportunity to the assessee. Accordingly, this ground of appeal of the assessee is allowed for statistical purposes.

Ground No. 3(a) to 3(c):

ITA Nos. 8641 & 8642/Mum/2011 A.Ys. 1999-2000 & 2000-01 7 Raymond Limited Vs. The Deputy Commissioner of Income Tax-2(3) 9. Ground of appeal 3(a) to 3(c) are pertained to the issue of not granting interest u/s 244A(a) of the Act on self assessment tax paid by the assessee. 10. Heard both the sides and perused the material on record. The ld. CIT(A) held that because of no express provision, no interest can be paid on the self assessment tax paid by the assessee. The ld. Counsel opposed the decision of ld. CIT(A) after placing reliance upon the various judicial pronouncements of the coordinate bench discussed as under: (i) The ITAT, Mumbai in the case of Grasim Industries Ltd. Vs. DCIT (123 Taxmann.com 312) (Mum) held that assessee would be entitled to interest u/s 244A(1)(b) on self assessment tax from the date of payment of self assessment tax till date of actual payment of refund. (ii) The decision of ITAT, Mumbai, in the case of ACIT Vs. SBI vide ITA No. 5908/Mum/2017 & 5909/Mum/2017, dated 19.06.2019. (iii) The Hon’ble jurisdictional High Court of Bombay in the case of Stock Holding Corporation of India Ltd. Vs. CIT reported in (2015) 53 taxmann.com 106 (Bom) dated 17.11.2014 which was discussed in the decision of the ITAT, Mumbai in the case of ACIT Vs. SBI as referred supra in this order. The relevant operating para is reproduced as under: “7. We have considered the rival submissions. On a bare analysis of Section 244A(1) of the Act it is clear that amount paid by the petitioner as tax on self assessment would not stand covered by Section 244A(1)(a) of the Act. This is so as it is neither the payment of tax by way of advance tax or by way of tax deducted at source. Thus tax paid on self assessment would fall under Section 244A(1)(b) of the Act, i.e. a residuary clause covering refunds of amount not falling under Section 244A(1) of the Act. The revenue contends that in the absence of tax on self assessment finding mention in Section 244A(1)(a) of the Act, no interest is payable under Section 244A(1) of the Act and Section 244A(1)(b) of the Act would

ITA Nos. 8641 & 8642/Mum/2011 A.Ys. 1999-2000 & 2000-01 8 Raymond Limited Vs. The Deputy Commissioner of Income Tax-2(3)

have no application. This contention is opposed to the meaning of the provision disclosed even on a bare reading. If the tax paid is not covered by clause (a) of Section 244A(1), it falls within clause (b), which is a residuary clause. Besides, this contention stands negatived by the CBDT Circular bearing No.549 dated 31 October 1989 wherein reference is made to Section 244A and para 11.4 thereof reads as under :- 11.4 The provisions of the new section 244A are as under:- (i) Sub-section (1) provides that where in pursuance of any order passed under this Act, refund of any amount becomes due to the assessee then- (a) if the refund is out of any advance tax paid or tax deducted at source during the financial year immediately preceding the assessment year, interest shall be payable for the period starting from the 1st April of the assessment year and on the date of grant of the refund. No interest shall, however, be payable, if the amount of refund is less than 10 per cent of the tax determined on regular assessment; (b) if the refund is out of any tax, other than advance tax or tax deducted at source or penalty, interest shall be payable for the period starting from the date of payment of such tax or penalty and ending on the date of the grant of the refund. (Refer to example III in para 11.8).” (Emphasis supplied) The inferences to be drawn from the Board's circular is clear that if refund is out of any tax other than out of advance-tax or tax deducted at source, interest shall be payable from the date of payment of tax and ending on the date of the grant of refund. It is to be noted that nowhere does the CBDT even remotely suggest that interest is not payable by the Department on self-assessment tax. Moreover, the amount paid under Section 140A of the Act on self assessment is an amount payable as and by way of the tax after noticing that there is likely to be shortfall in the taxes already paid. Thus this payment is considered to be a tax under the aforesaid provision. 8. The contention of revenue is that no interest at all is payable to the petitioner under Section 244A(1)(a) and (b) of the Act unless the amounts have been paid as tax. It would not cover cases where the payment is gratuitous as is evident from the fact that the petitioner in its computation after paying tax on self assessment of Rs.2.60 crores seeks a refund of Rs.47 lacs. According to him it has to be refund of amounts paid as tax. We find that Section 244A(1) of the Act commences with the word “when refund of any amount becomes due to the assessee under this Act...”. Subclause (b) thereof

ITA Nos. 8641 & 8642/Mum/2011 A.Ys. 1999-2000 & 2000-01 9 Raymond Limited Vs. The Deputy Commissioner of Income Tax-2(3)

commences with the words “in any other case....”. The words used in Section 244A(1) of the Act are clear inasmuch as it provides that refund of any amount that become due to any assessee under the Act will entitle the assessee to interest. In any case in the present facts, the amount on which the refund is being claimed was originally paid as tax on self-assessment under Section 140A of the Act and evidence of the same in the form of challan was enclosed to the Return of Income. In fact when the Assessing Officer passed the Assessment Order on 31 December 1996, he accepted the entire amount paid as tax on self assessment as a payment of tax. One more feature to be noticed is that when any refund becomes due to an assessee out of tax paid, it becomes so only after holding that it is not the tax payable. Thus we find no substance in the first objection of the revenue that the amount paid as tax on self assessment is not tax and therefore no interest can be granted on refund of such amounts which are not tax. 9. The next objection of the Revenue is that the decision of the Apex Court in Tata Chemicals (supra) is inapplicable to the present facts. The case before the Apex Court in Tata Chemicals (supra) arose as the quantum of tax deducted by it consequent to the order passed by the Assessing Officer directing it to deduct tax on amounts being remitted abroad, it was found in appeal that the payments made were in the nature of reimbursement and therefore not a part of income of the party to whom it is being remitted for the purposes of deduction of tax at source. Therefore Tata Chemicals sought refund of the amount paid in excess along with interest thereof. This the Supreme Court granted while making the following observations with regard to the liability to pay interest : “A “tax refund” is a refund of taxes when the tax liability is less than the tax paid. As per the old section an assessee was entitled for payment of interest on the amount of taxes refunded pursuant to an order passed under the Act, including the order passed in an appeal. In the present fact scenario, the deductor/assessee had paid taxes pursuant to a special order passed by the assessing officer/Income Tax Officer. In the appeal filed against the said order the assessee has succeeded and a direction is issued by the appellate authority to refund the tax paid. The amount paid by the resident/deductor was retained by the Government till a direction was issued by the appellate authority to refund the same. When the said amount is refunded it should carry interest in the matter of course. As held by the Courts while awarding interest, it is a kind of compensation of use and retention of the money collected unauthorizedly by the Department. When the collection is illegal, there is corresponding obligation on the revenue to refund such amount with interest in as much as they have retained and enjoyed the money deposited. Even the Department has understood the object behind insertion of Section 244A, as that, an assessee is entitled to payment of interest for money remaining with the Government which would be refunded. There is no reason to restrict the ITA Nos. 8641 & 8642/Mum/2011 A.Ys. 1999-2000 & 2000-01 10 Raymond Limited Vs. The Deputy Commissioner of Income Tax-2(3)

same to an assessee only without extending the similar benefit to a resident/ deductor who has deducted tax at source and deposited the same before remitting the amount payable to a non-resident/ foreign company. Providing for payment of interest in case of refund of amounts paid as tax or deemed tax or advance tax is a method now statutorily adopted by fiscal legislation to ensure that the aforesaid amount of tax which has been duly paid in prescribed time and provisions in that behalf form part of the recovery machinery provided in a taxing Statute. Refund due and payable to the assessee is debt- owed and payable by the Revenue. The Government, there being no express statutory provision for payment of interest on the refund of excess amount/tax collected by the Revenue, cannot shrug off its apparent obligation to reimburse the deductors lawful monies with the accrued interest for the period of undue retention of such monies. The State having received the money without right, and having retained and used it, is bound to make the party good, just as an individual would be under like circumstances. The obligation to refund money received and retained without right implies and carries with it the right to interest. Whenever money has been received by a party which ex aequo et bono ought to be refunded, the right to interest follows, as a matter of course. In the present case, it is not in doubt that the payment of tax made by resident/ depositor is in excess and the department chooses to refund the excess payment of tax to the depositor. We have held the interest requires to be paid on such refunds. The catechize is from what date interest is payable, since the present case does not fall either under clause (a) or (b) of Section 244A of the Act. In the absence of an express provision as contained in clause (a), it cannot be said that the interest is payable from the 1st of April of the assessment year. Simultaneously, since the said payment is not made pursuant to a notice issued under Section 156 of the Act, Explanation to clause (b) has no application. In such cases, as the opening words of clause (b) specifically referred to “as in any other case”, the interest is payable from the date of payment of tax. The sequel of our discussion is the resident/deductor is entitled not only the refund of tax deposited under Section 195(2) of the Act, but has to be refunded with interest from the date of payment of such tax.” Emphasis supplied. From the aforesaid observations of the Apex Court in Tata Chemicals, it would be clear that the requirement to pay interest arises whenever an amount is refunded to an assessee as it is a kind of compensation for use and retention of money collected by the revenue. 10. The only distinction being made in the present facts and those of Apex Court decision in Tata Chemicals is that the amount paid as tax on self assessment was paid voluntarily in the present case while in the case of Tata Chemicals Ltd. (supra) the tax was deducted at a higher rate in view of the order passed by the authority under the Act. We are unable to appreciate this distinction. This is for the reason that when an assessee pays tax either as ITA Nos. 8641 & 8642/Mum/2011 A.Ys. 1999-2000 & 2000-01 11 Raymond Limited Vs. The Deputy Commissioner of Income Tax-2(3) Advance tax or on self assessment, it is paid to discharge an obligation under the Act. Not complying with the obligation under the Act visits consequences to an assessee just as non compliance of orders passed by authorities under the Act would. Thus there is no voluntary payment of tax on self assessment as contended by the revenue. 11. The further submission of Mr. Pinto that in view of the Explanation to Section 244A(1)(b)of the Act the same would apply only when the amounts are paid consequent to a notice issued under Section 156 of the Act. Not otherwise. This very submission was advanced by the revenue before the Apex Court in the case of Tata Chemicals (supra). In fact, the first Appellate Authority in the case of Tata Chemicals (supra) had rejected the petitioner's claim for interest on the ground that in view of the Explanation appended to Section 244A(b) of the Act, refund of any amount under the aforesaid provision could only be in respect of refund of excess payment made under Section 156 of the Act. The aforesaid interpretation was negatived in the second appeal by the Tribunal as well as by the High Court and the Apex Court. 12. Similarly, the next contention urged on behalf of the revenue that the payment of interest should only be made from the date of notice under Section 156 of the Act is issued to the petitioner in terms of Explanation to Section 244A(1)(b) of the Act cannot be accepted for two reasons. Firstly, as held by the Supreme Court in Tata Chemicals (supra), the Explanation would have effect only where payments have been made pursuant to notice under Section 156 of the Act. In this case, the payment has not been made pursuant to any notice of demand but prior to the filing of the return of income in accordance with Section 140A of the Act. Secondly, the provisions of Section 244A(1) (b) very clearly mandate that the revenue would pay interest on the amount refunded for the period commencing from the date the payment of tax is made to the revenue upto the date when refund is granted to the revenue. Thus, the submission of Mr. Pinto that the interest is payable not from the date of payment but from the date of demand notice under Section 156 of the Act cannot be accepted as otherwise the legislation would have so provided in Section 244A 1(b) of the Act, rather then having provided from the date of payment of the tax. 13. We find support for our view from the decisions rendered by Karnataka High Court in Commissioner of Income-Tax v/s Vijaya Bank [2011] 338 ITR page 489 and Delhi High Court in Commissioner of Income-Tax v/s Sutlej Industries Ltd. [2010] 325 ITR page 331. In both cases in identical circumstances it was held that interest is payable from the date of payment of the tax on self

ITA Nos. 8641 & 8642/Mum/2011 A.Ys. 1999-2000 & 2000-01 12 Raymond Limited Vs. The Deputy Commissioner of Income Tax-2(3) assessment to the date of refund of the amounts under Section 244A of the Act. 14. Accordingly, for all the aforesaid reasons, we set aside the impugned order dated 28 September 1999. We direct the Assessing Officer to compute the interest payable from the date of payment on self assessment tax i.e. 31 August 1994 till the date of refund i.e. 24 October 1998. The revenue is directed to compute the interest due to the petitioner and pay the same within six weeks from today. 15. Petition allowed. No order as to costs.” (iv) The ld. D.R. referred the decision of ITAT Delhi in the case of Maruti Suzuki India Ltd. Vs. CIT (2000) 119 taxman.com (Delhi) wherein held that no interest would be paid if amount of refund is less that 10% of tax determined in cases of refund out of tax paid other than self assessment tax where refund is arising out of self assessment interest would be calculated on self assessment tax refund from the date of payment of self assessment tax. 11. Respectfully following the decision of Hon’ble jurisdictional High Court and ITAT, Mumbai as supra, we direct the A.O to compute the interest payable from the date of payment of self assessment tax to the date of refund as directed in above referred decision. Therefore, this ground of appeal of the assessee is partly allowed. Ground No. 4 & 5: 12. Both these ground are pertained to the issue of granting of interest u/s 244A by determining the refund amount at each stage from the date when the refund amount become due till the date when the refund order is granted and further the refund amount granted to the assessee ought to be adjusted against interest receivable first as against principle. 13. The assessee has objection the stand of the ld. CIT(A) for not granting refund at each stage from the date then the refund become due

ITA Nos. 8641 & 8642/Mum/2011 A.Ys. 1999-2000 & 2000-01 13 Raymond Limited Vs. The Deputy Commissioner of Income Tax-2(3) till date when the refund order is granted and not adjusting the refund against interest receivable first as against principle. The ld. counsel has placed reliance on the various judicial pronouncements as discussed below on the issue. (i) In the case of India Trade Promotion Organization Vs. CIT (2013) 38 taxman.com 223 (Delhi) held that revenue would be liable to pay interest u/s 244A on the refund amount up to the date of payment. (ii) The ITAT, Mumbai in the case of Grasim Industries Ltd. Vs. DCIT (2013) 123 taxman.com 312 held that amount of refund granted earlier should be first adjusted against correct amount of interest and consequently shortfall of the refund is to be regarded as shortfall of tax and that shortfall then be considered for purpose of computing further interest payable to assessee under the Section 244A till date of grant of such refund. (iii) The ITAT, Kolkata Bench in the case of DCIT Vs. Pearless General Finance & Investment Company Ltd. (2017) 88 taxman.com 708 held that AO should compute amount of interest u/s 244A by first adjusting amount of refund already granted towards interest component and balance left if any shall be adjusted towards tax components. (iv) The ITAT, Mumbai in the case of Union Bank of India Vs. ACIT (2016) 72 taxman.com 348, held that amount of refund granted earlier should be adjusted first against interest component of earlier refund and thereafter balance amount should be adjusted against principle component of tax in refund granted earlier on which assessee is entitled to get interest u/s 244A of the Act.

ITA Nos. 8641 & 8642/Mum/2011 A.Ys. 1999-2000 & 2000-01 14 Raymond Limited Vs. The Deputy Commissioner of Income Tax-2(3) (v) In the case of City Bank Vs. CIT, Hon’ble jurisdictional High Court of Bombay vide IT No. 06 of 2001 dated 17.07.2003 held that interest u/s 244A of the Act should be granted up to the date of refund order and not up to the date of receipt of the refund order. (vi) The Hon’ble High Court of Bombay in the case of CIT vs. Pfizer Ltd. (1991) 191 ITR 626 (Bom) held that assessee was entitled to interest u/s 214 for each of assessment year under consideration up to date of receipt of refund order. (vii) The ITAT, Mumbai in the case of Bank of Baroda Vs. DCIT Vs. vide ITA No. 1646/Mum/2017 after following the decision of the coordinate bench in the case of Union of India Vs. ACIT as supra held that the assessee would be entitled for interest on the unpaid refund in accordance with principle laid out in the aforesaid decision of ITAT in the case of Union Bank of India. 14. Respectfully, following the decision of jurisdictional High Court and the decision of coordinate bench of the ITAT, Mumbai and other judicial pronouncements as discussed supra, we direct the A.O to allow interest u/s 244A to the assessee on the refund amount up to the date of payment at each stage and adjusting of refund against interest receivable first as against the principle. Therefore, ground 4 & 5 of the assessee are allowed as directed above. 15. In the result, the appeal of the assessee is partly allowed. Ground No. 1(a) to 1(c):

ITA Nos. 8641 & 8642/Mum/2011 A.Ys. 1999-2000 & 2000-01 15 Raymond Limited Vs. The Deputy Commissioner of Income Tax-2(3) 16. As the facts and issue involved in these grounds of appeal are the same as discussed supra in this order in ITA No. 8641/Mum/2011 vide ground no. 1(a) to 1(c), therefore applying the finding as mutatis mutandis these ground of appeals of the assessee are partly allowed. Ground No. 2 and 3: 17. As the facts and issue involved in these grounds of appeal are the same as discussed supra in order ITA No. 8641/Mum/2011 vide grounds of appeal No. 4 & 5, therefore, applying the findings mutatis mutandis, these grounds of appeal are allowed. 18. In the result, the appeals of the assessee is partly allowed. Order pronounced in the open court on 15.06.2022 (SANDEEP SINGH KARHAIL) ACCOUNTANT MEMBER Mumbai, Dated 15.06.2022 PS: Rohit आदेश की प्रतितिति अग्रेतिि/Copy of the Order forwarded to : 1. अपीलाथी / The Appellant 2. प्रत्यथी / The Respondent. 3. संबंधधत आयकर आयुक्त / The CIT(A) 4. आयकर आयुक्त(अपील) / Concerned CIT धिभागीय प्रधतधनधध, आयकर अपीलीय अधधकरण, अहमदाबाद / DR, ITAT, Mumbai 5. 6. गार्ड फाईल / Guard file.

आदेशानुसार/BY ORDER, सत्याधपत प्रधत ////

(Asst.