1990 (10) TMI 100

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....ayable on the basis of said estimated income, the assessee had reduced the total tax payable by amounting representing tax deductible at source during the financial year from said interest income as per provisions in sec. 194-A of the Act. 2.2 According to the ITO, who initiated proceedings u/s 273(2)(a) of the Act, the assessee should not have reduced the income-tax calculated on estimated income by the amount representing tax deductible at source u/s. 194-A on interest income because the companies who had incurred liability to pay interest to the assessee-company had not in fact deducted the tax at source in the relevant financial year but had done so in the next financial year. According to the ITO, the assessee knew this fact and as su....

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....relevant financial year. 4. We are unable to accept these submissions. We find that legal obligation of the assessee at the time of filing of estimate was to make estimate of income of the current year and calculate the advance-tax payable thereon and file the said estimate and pay the advance-tax accordingly. The advance tax was required to be computed by the assessee in the manner laid down in sec. 209 of the Act. Under that provision, the assessee had to calculate income-tax on current estimated income at the rates in force in the financial year and income-tax so calculated is to be reduced by the amount of Income-tax which would be deductible at source during the said financial year under any provision of the Act from any income which....