Decided on January 25,1983

Rathi C B Respondents


DESAI,J. - (1.) THE petitioner is a public limited company incorporated under the provisions of the Companies Act, 1956. The petitioner is carrying on the business of manufacturing oil engines, water pumps, etc. The petitioner also carries on the business of exporting oil -engines manufactured by it.
(2.) THE petitioner is assessed to income -tax under the I.T. Act, 1961 (hereinafter referred to as 'the Act'). The question arising for determination in the instant case relates to assessment year 1975 -76, the relevant previous year being Samvat year 2030. The petitioner having been previously assessed to income -tax by way of regular assessment under the Act, the ITO having jurisdiction over the petitioner made an order under sub -s. (1) of s. 210 of the Act requiring the petitioner to pay advance tax in the sum of Rs. 89,438 on the basis of the total income of Rs. 1,55,715 in respect of which the petitioner was assessed to income -tax for the assessment year 1973 -74. The notice of demand dated May 13, 1974, issued in pursuance of the said order, specified that the said advance tax was payable in three equal instalments of Rs. 29,813 each during the financial year 1974 -75. In compliance with the said notice, the petitioner paid two instalments of advance tax on June 15 and September 15, 1974. However, as the current income of the petitioner was likely to be greater than the income on which the advance tax payable by it had been computed, the petitioner sent to the ITO an estimate of the current income under s. 212(3A) and therein the current income was estimated at Rs. 2,10,336. Be it stated that, according to the petitioner, the current income was estimated as Rs. 2,10,336 after taking into consideration the deduction allowable under section 35B of the Act, that is to say, the export markets development allowance. The said estimate was sent before the date on which the last instalment of advance tax fell due, that is to say, before December 15, 1974. The petitioner also calculated in the manner laid down in the relevant provisions of the Act, the advance tax payable by it, on such current income and paid within time a sum of Rs. 61,879 as and by way of the final instalment of advance tax in accordance with such calculation. The petitioner, accordingly, paid a total sum of Rs. 1,21,505 by way of advance tax.
(3.) ON June 30, 1975, the petitioner furnished the return of income for assessment year 1975 -76 showing total income of Rs. 4,18,234. The total income was computed after making a deduction in respect of the export markets development allowance permissible under s. 35B on an expenditure of Rs. 12,76,522 incurred during the relevant previous year. On July 19, 1975, the petitioner furnished a revised return of income showing total income of Rs. 2,29,149, as according to the petitioner, there were some mistakes in the return previously filed. The same deduction under s. 35B was made while computing total income as aforesaid in the revised return. On August 28, 1975, the petitioner paid a sum of Rs. 9,776 as and by way of tax on self -assessment under s. 140A. By an order made on May 9, 1978, under s. 143(3), the ITO assessed the total income of the petitioner at Rs. 4,92,950. In the course of the said order, the ITO rejected the claim in respect of the export markets development allowance on the expenditure of Rs. 12,76,522 incurred during the relevant previous year, except to the extent of Rs. 20,248, which sum reflected the expenditure incurred on travel outside India. The ITO also directed that interest shall be payable by the petitioner under s. 215 upon the amount by which the advance tax paid fell short of the assessed tax (see Ex.'A'). Be it stated that the interest payable accordingly worked out to Rs. 59,978.;

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