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TMI Blog1990 (9) TMI 142X X X X Extracts X X X X X X X X Extracts X X X X ..... ly been made, this injustice has been set right by the first appellate authority. In respect of disallowance of Rs. 18,208 the learned counsel contended that most of the expenditure related to purchase of sweets etc. provided to the customers on Diwali and other occasions. The learned counsel accordingly contended that the expenditure related to the business and thus was allowable as a deduction in computing the income from business. The learned counsel relied upon the decision of ITAT Chandigarh Bench in the case of Sandika (P.) Ltd. v. ITO [1982] 13 TTJ 394 and on the decision of the Ahmedabad Bench in the case of ITO v. SLM Maneklal Industries Ltd. [1986] 17 ITD 575, for the proposition that the Diwali expenses is expenditure relating to ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ppeal relates to levy of interest u/s 216. Assessee filed a statement of advance tax as required u/s 209A, on15th September, 1982declaring income of Rs. 10,58,000. Simultaneously Form No. 29 being higher estimate of income was filed showing an income of Rs. 16 lakhs. Two advance tax instalments on the basis of estimated income of Rs. 16 lakhs had been paid by the assessee. On15th March, 1983assessee revised the estimate showing income of Rs. 25 lakhs and paid the advance tax within time. According to the assessing officer assessee has under-estimated the advance tax payable by him and accordingly thereby reduced the amount payable in two instalments. Thus assessee has been held to be liable to interest under section 216. The CIT(A) has conf ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... such statement in equal instalments. Sub-section (2) of Section 209A gives an option to the assessee to file estimate of income in lieu of statement of advance tax if the current income of the assessee is likely to be less than the income on which advance tax is payable on the basis of statement of advance tax under sub-section (1). Under sub-section (3) of Section 209A assessee is also given an option to file an estimate of income at any time before the last instalment is due in such case if his current income is likely to be less than the income on which advance tax is payable by him on the basis of statement of advance-tax is filed by him. Sub-section (4) of Section 209A makes it obligatory for those assessees whose income is likely to b ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t of advance tax on a part of his income, he may direct that the assessee shall pay simple interest at 15 per cent per annum-- (i) in the case referred to in clause (a), for the period during which the payment was deficient, on the difference between the amount paid in each such instalment and the amount which should have been paid, having regard to the aggregate advance tax actually paid during the year ; and (ii) in the case referred to in clause (b), for the period during which the payment of advance tax was so deferred. " For the purpose of levy of interest u/s 216 the assessing officer must be satisfied that by reason of under-estimate of income the assessee has reduced the amount payable in either of the first two instalments. I ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... income showing an income of Rs. 16 lakhs on15th September, 1982though the assessee's obligation to file revised estimate was to be fulfilled by the date on which the last instalment of advance tax was due. The bona fides of the assessee are established when it is seen that assessee has paid more advance tax than could lawfully be expected from it. In our view, interest u/s 216 is imposable in such cases where assessee files an estimate of income claiming his current income to be less than the income on the basis of which the advance tax is lawfully due. Thus where an estimate is filed under sub-section (2) or sub-section (3) of Section 209A, assessee would be duty bound to show that the estimate filed by him was a bona fide estimate and tha ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... gher than as per the statement of advance tax. Interest under sections 215 and 217 is chargeable under different circumstances with which we are not concerned in this case. Considering the facts and circumstances of the case, we are of the view that interest under section 216 is not chargeable in this case. By filing an estimate showing income of Rs. 16 lakhs on 15th March, 1982 as against the income of Rs. 10,58,000 on which advance tax was payable, the assessee has not unde-restimated the advance tax payable by him to reduce the amount payable in either of the first two instalments but on the contrary has enhanced his liability to pay more advance tax than payable by him under sub-section (1) of Section 209A. As such interest charged unde ..... X X X X Extracts X X X X X X X X Extracts X X X X
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