TMI Blog1959 (12) TMI 40X X X X Extracts X X X X X X X X Extracts X X X X ..... 9, 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 ₹ 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 ₹ 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 disallowance and held that the deduction was not permissible unde ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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 determined. This statutory obligation of the assessee was incidental to its character as taxpayer. The assessee as taxpayer ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ss. The liability for the interest was not incurred in the running of the business, but was one to which all assessees are exposed whether they do business or not. On this part of the argument Mr. Mitra strongly relied upon the decision of Badridas Daga v. Commissioner of Income-tax [1958] 34 I.T.R 10. Having regard to the principles enunciated by Venkatarama Aiyar, J., at page 16 of the report of that case, I am satisfied that the loss cannot be said to be a trading loss or a loss which us deductible under section 10(1) for the purpose of computing and ascertaining net profits and gains of the business. In my opinion the expenditure is not allowable as a deduction while computing the profits of the business. I, therefore, propose tha ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
