ASSOCIATED STONE INDUSTRIES Vs. COMMISSIONER OF INCOME TAX

JUDGEMENT

(1.) THE Income-tax Appellate Tribunal has referred the following two questions of law arising out of its order dated November 14, 1985, in respect of the assessment year 1978-79 under Section 256(1) of the Income-tax Act, 1961 :

(2.) THE brief facts of the case are that the assessee submitted the returns of its income and claimed a refund of Rs. 1,82,000 on the ground that the advance tax paid was Rs. 15.62 lakhs which was deposited without taking into consideration the tax deducted at source. In the assessment which was framed by the Inspecting Assistant Commissioner (Assessment), a demand of Rs. 1.4 lakhs was raised as per order dated November 1, 1980. THE assessee deposited a sum of Rs. 75,000 against this demand. Against the order of assessment, an appeal was preferred before the Commissioner of Income-tax (Appeals) and as a result of the appellate order, the tax payable was reduced to Rs. 14.51 lakhs. THE Inspecting Assistant Commissioner (Assessment) while giving effect to the order of the Commissioner of Income-tax (Appeals), found that a sum of Rs. 1.56 lakhs was refundable to the assessee which included Rs. 75,000 deposited on January 19, 1981. THE interest under Section 214(1A) on the amount of Rs. 75,000 alone was allowed to the extent of Rs. 3,750. THE assessee thereafter moved an application under Section 154 praying that the amount which was deposited as advance tax is liable to be refunded along with interest and the interest alone comes to Rs. 44,320. It was claimed by the assessee that besides the amount of Rs. 75,000 which was deposited by the assessee on January 19, 1981, on which interest for five months has been given, the balance amount of refund Rs. 1,85,806-75,000 = 1,10,806, is due on account of advance tax which has been paid in excess of the demand of the above year and interest should be allowed for the period from April 1, 1978, to August 19, 1981, for 40 months. THE application submitted by the assessee was rejected by the Inspecting Assistant Commissioner on June 24, 1982.

(3.) CONSEQUENTLY, the reference is answered in favour of the Revenue and against the assessee. No order as to costs.