9911796707
TMI Blog2007 (6) TMI 154X X X X Extracts X X X X X X X X Extracts X X X X ..... C was not warranted? 2. The facts leading to the above substantial question of law are as under: 3. The assessee is a company incorporated under the Companies Act 1956. The relevant assessment year is 2001-2002 and the corresponding accounting year ended on 31.03.2001. The assessee filed Return of income 30.10.2001 admitting total income of Rs.16,67,51,520/-. The Return was processed under Section 143(1) of the Income-tax Act ("Act" in short). Later, the assessment was taken up for scrutiny and the same was completed under Section 143(3) and determined a total income of Rs.17,31,76,488/-. The assessee was under the impression that the payments made under Voluntary Retirement Scheme ("VRS" in short) are allowable deductio ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 4B and 234C of the Act was justified. 5. Heard the counsel. The assessment year is 2001-2002. The assessee is liable to pay the advance tax on or before 15.06.2000, 15.09.2000, 15.12.2000 and 15.03.2001. The assessee had paid the advance tax, but such advance tax was paid after deducting the payment made under VRS. He further submitted that, at the relevant point of time, there were two binding decision of this Court in the case of C.I.T. Vs. George Oakes Ltd. (197 ITR 288) and in the case of C.I.T. Vs. Simpson & Co. Ltd. (230 ITR 794), in favour of the assessee. In view of the said judgments the assessee was allowed to deduct expenditure incurred on payment to workers towards VRS. Only later, a new provision ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... p; Advance tax shall be payable during a financial year in every case where the amount of such tax payable by the assessee during that year, as computed in accordance with the provisions of this Chapter, is five thousand rupees or more.". 7. A combined reading of the above provisions makes it clear that the assessee has to pay taxes in advance in respect of the total income of the assessee, which would be chargeable in a particular assessment year. Now before the introduction of section 35DDA, the legal dictum was very clear that the assessee could claim expenditure incurred on account of payment made for VRS by the assessee in view of the binding decisions of the Hon'ble jurisdictional High Court in the case of CIT ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ble". In the case before us also, the assessee could not have visualize till the last instalment of advance tax i.e. 15.03.2001 that he would not be entitled to deduct VRS payments. Therefore, the assessee could not have done anything other than to estimate the liability to pay advance tax on the basis of existing provisions. We are of the considered opinion that in such situation, it cannot be said that the assessee was liable to pay advance tax. Once we come to the conclusion that the assessee was not liable to pay advance tax, there is no question of charging tax under section 234B and 234C. In similar circumstances in the case of Priyanka Overseas Ltd. v. DCIT, where the assessee had treated the receipt of ..... X X X X Extracts X X X X X X X X Extracts X X X X
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