TMI Blog1998 (3) TMI 168X X X X Extracts X X X X X X X X Extracts X X X X ..... illeries at Shertallay, Hyderabad, Goa and Hathidah. In addition, it has a polymer unit at Vizag. 3. While completing the assessment, the AO charged interest under section 7(c) of the Companies (Profits) Surtax Act, 1964, among other things, in a sum of Rs. 96,54,020. On 12-6-1981, the assessee filed an estimate of advance tax under section 7A of the Surtax Act computing the chargeable profits at nil. In a letter enclosed to the said estimate, it was stated as follows: "We have submitted an application to the Specified Authority under section 72A of the Income-tax Act regarding our proposed Scheme of Amalgamation with Hindustan Polymers Limited and, as the application has been approved by the Central Government under the provisions of s ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... plus of Rs. 1,06,24,243. In this return, the loss under the head 'Profits and gains of business', was disclosed at Rs. 1,11,41,193. This amount was arrived at after setting off the accumulated losses, etc., of the erstwhile Hindustan Polymers Limited. Up to 31-3-1981, the accumulated losses, unabsorbed depreciation, development rebate and investment allowance of M/s. Hindustan Polymers Ltd. accounted for Rs. 1,10,96,733. On completion of the assessment under section 6(2) of the Sur-tax Act, the AO levied interest under section 7(c) amounting to Rs. 96,54,020. The assessee appealed. 4. Before the CIT(A), it was argued that the provisions of section 7(c) of the Companies (Profits) Surtax Act (hereinafter referred to as the Act) were not att ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ied under section 7(c) of the Act was rejected by the IAC by his order dated 10th March, 1987. A copy of the letter addressed to the ITO, Companies Circle 1(2), Madras by the assessee dated 25-9-1982 for set off of accumulated losses, etc., of M/s. Hindustan Polymers Ltd. is furnished to us. A copy of the letter dated 13-6-1984 from the Ministry of Industry, Department of Industrial Development regarding the recommendation of the Specified Authority under section 72A(1) of the IT Act on amalgamation of M/s. Hindustan Polymers Ltd. with the assessee has also been filed before us. The learned Senior Advocate contended that section 7(c) of the Act does not speak of levy of interest for non-payment of advance surtax. Hence, the interest levied ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... case now before us and this decision also does not apply here. He finally contended that the levy of interest under section 7(c) of the Act is perfectly justified and no interference is required in the orders of the authorities below. 7. We have carefully considered the rival submissions. In our opinion, the AO is justified in levying interest under section 7(c) of the Act for nonpayment of advance surtax in this case. Admittedly, the assessee here filed a 'nil' statement on 12-6-1981. Though the assessee had filed a petition for waiver of interest under section 7(c) of the Act it was rejected by the IAC as stated earlier. The case of the assessee is that since it has filed a nil estimate of advance tax under section 7A of the Act it is n ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... cts of the present case. This decision relates to charging of interest under section 215 of the IT Act. As per this decision, according to law as then existing (1963-64) interest under section 215 of the IT Act, 1961, could only be charged when an estimate under section 211 has been filed, advance tax on the basis of such estimate has been paid and the advance tax paid is found to be less than 75 per cent of the tax determined on the basis of the regular assessment and that an estimate which is filed beyond time is not a valid estimate and interest under section 215 could not be charged on the basis of such estimate. In our considered opinion, the facts of the reported decision are distinguishable from the facts of the case on hand. In this ..... X X X X Extracts X X X X X X X X Extracts X X X X
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