1959 (12) TMI 40

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....5. The assessment for the assessment year 1948-49 was made on April 29, 1950, and as the tax paid by the assessee on the basis of its own estimate was less than eighty per cent. of the tax determined on such assessment, the assessee was charged with interest amounting to Rs. 92,301-12-0 under section 18A(6). The assessee paid this amount on July 7, 1950, i.e., in the previous year corresponding to the assessment year 1951-52. During the assessment proceedings for the assessment year 1951-52 the assessee claimed that the sum of Rs. 92301-12-0 was an allowable deduction in arriving at its taxable profits. The Income-tax Officer disallowed the claim without assigning any reason. On appeal the Appellate Assistant Commissioner confirmed the disa....

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..... The demand for advance payment of tax was made on the basis of the statutory estimate of the tax payable by the assessee for the next assessment year in respect of the part of its income to which section 18A(1) applied. The assessee was not bound to accept this statutory estimate. It was open to the assessee to make its own estimate of the tax and to pay the tax on the basis of such estimate. The assessee selected to make its own estimate and to pay the tax on that basis. The tax so paid was less than eighty per cent. of the tax determined on regular assessment. In view of section 18A(6) the assessee was under a statutory obligation to pay interest upon the amount by which the tax paid by it fell short of eighty per cent. of the tax so de....