Vijay Kumar Bhati vs Commissioner Of Income Tax And Anr.

The Supreme Court addressed the appeal concerning the refund of amounts withdrawn from the appellant's Foreign Currency Non-Resident Account under Section 281B of the Income Tax Act, 1961. The Court held that the appellant was entitled to a refund of the amount withdrawn, as the assessment order had been set aside by the Tribunal. The Court clarified that the interest payable on the refunded amount should be calculated at the rate the appellant would have earned had the funds remained in the account, thereby establishing the principle that interest should reflect the actual loss of use of funds.