BAJAJ ELECTRICALS LTD,MUMBAI vs. ASST CIT (OSD) 2(1), MUMBAI

5. As regards to the disallowance of administrative expenses, we noted that the CIT(A) has restricted the disallowance at ₹38,690/- as against the amount offered by suo mot at ₹60,913/-. We find no infirmity in the order of CIT(A) and this issue of the assessee’s appeal is dismissed.

6. The second issue of assessee in AY 2007-08 is as regards to the disallowance of commission expenses of ₹ 8,26,90,631/-. For this assessee has raised the following ground No. 2 to 5: - “2. On the facts and in the circumstances of the case and in law, the Commissioner of Income-tax (Appeals) erred in disallowing the commission expense amounting to Rs. 826,90631/-

3. On the facts and in the circumstances of the case and in law, the Commissioner of Income-tax (Appeals) erred in not admitting the ground of appeal pertaining to disallowance of ITAs No. 3892&4516/Mum/2011, 3789& 3811/Mum/2012 commission expenses of Rs.8,2690,631 on the ground that the appellant itself had foregone the claim for deduction of commission expense during the expense of the assessment proceedings.

4. On the facts and in the circumstances of the case and in law, the commissioner of Income-tax (Appeals) erred in ho4ding that the commission expenses incurred by the appellant amounting to Rs 82690631 was bogus in nature.

5. On the facts and in the circumstances of the case and in law the Commissioner of income-tax (Appeals) erred in observing that the appellant had admitted before the Assessing Officer that the commission payment was not genuine.”

7. Briefly stated facts are that during the previous year 2006-07 relevant to AY 2007-08, the assessee incurred expenditure on commission on sales amounting to ₹9.76 crores and claim deduction in the original return of income. During the course of survey on the premises one of the commission agents ITAs No. 3892&4516/Mum/2011, 3789& 3811/Mum/2012 namely Nischal Corporate Securities Limited, the assessee vide letter dated 31.03.2009 stated that it is not possible for assessee to provide documentary evidences to substantiate the transaction of commission paid to Nischal Corporate Securities Limited. The assessee in the revise return of income filed on 31.03.2009, suo moto disclosed the commission expenses as income amounting to ₹1,56,29,741/-. Subsequently, during the course of scrutiny assessment proceedings assessee was asked to filed complete details of commission payment and also justification providing name and addresses of the parties, the assessee vide letter dated 29.12.2009 decided to forego of its claim of commission expenses amounting to ₹8,26,90,631/-. The AO as well as CIT(A) has reproduced the relevant letter dated 29.12.2009, wherein the disclosure was made only with a condition that no panel proceedings will be initiated. The assessee also filed revised return of income on 19.12.2009. The AO has not honour the commitment made to the assessee and hence, the assessee challenged the disallowance of commission expenses before Commissioner of Income Tax (Appeals). Before CIT(A) assessee filed various details and submissions but CIT(A) simply confirmed the addition by observing as under: - “Decision I have duly considered the submissions of the AR and the facts of the case. I find that the appellant has admitted before the ITAs No. 3892&4516/Mum/2011, 3789& 3811/Mum/2012 AO that the commission payment is not genuine. Accordingly, the appellant has filed revised return and paid taxes on the revised income by including the commission paid. In such circumstances, in my considered opinion, the assessee loses the right to appeal as there is no grievance for the assessee. The principle of estoppels would apply and the appellant would be prevented from going back on his admission of payment of bogus commission. It is not the case of the assessee that he was coerced to admit the commission payment as bogus. The assessee’s only contention is that they admitted the bogus commission due to their inability to produce parties which are spread over all over India and in order to buy peace with the Department. According to AR the AO has accepted only one part of his proposal and added the commission paid as their income. At the same time, the AO has also initiated penalty proceedings. That means the proposal to buy peace with the Department has not been accepted in ITAs No. 3892&4516/Mum/2011, 3789& 3811/Mum/2012 toto. Therefore, he has got a right to appeal. I do not agree with the submissions of the AR. Once the assessee has admitted that commission payment is bogus there is no grievance for which he can appeal. Besides there is no provision in the Income-tax Act according to which there can be any compromise between the Department and the assessee. The addition has been made in accordance with law and based on the facts gathered by the AO. Hence, the addition is upheld and appeal on this ground is dismissed. The case laws cited by the AR are distinguishable on facts. For example, if agriculture income is not taxable, it cannot be taxed even if it is offered by the assessee and the right of appeal in such cases would always be there. In this case, no such facts are there. The assessee has admitted payment of commission as bogus and the same has been added to the total income of the assessee. The principle of resjudicata does not apply to ITAs No. 3892&4516/Mum/2011, 3789& 3811/Mum/2012 Income-tax proceedings. So even if the AO ahs allowed payment of commission in ensuing years, commission payment is not admissible in this year. Reliance on case law is placed. This ground of appeal is dismissed.”

Aggrieved, now assessee is in appeal before Tribunal.

ITAs No. 3892&4516/Mum/2011, 3789& 3811/Mum/2012

ITAs No. 3892&4516/Mum/2011, 3789& 3811/Mum/2012 "The provisions of section 2 of, and the First Schedule to, the Finance Act, 1951, shall apply in relation to income-tax and super-tax for the financial year 1952-53 as they apply in relation to income-tax and super- tax for the financial year 1951- 52.........." There was no specific mention whatsoever of surcharge in section 2 nor was there any modification of the First Schedule to the Finance Act of 1951 which contained the rates, etc., relating to the surcharge. Similar state of affairs existed with regard to the Finance Acts of 1953, 1954 and 1957. Section 2 of the Finance Act, 1971, is to the effect that the provisions of section 2 and of the First Schedule to the Finance Act, 1970, shall apply in relation to income-tax for the assessment year or, as the case may be, the financial year commencing on the first day of April, 1971, as they apply in relation to income- tax for the assessment year commencing on the first day of April, 1970, with ITAs No. 3892&4516/Mum/2011, 3789& 3811/Mum/2012 certain modifications set out in the section. The First Schedule to the Finance Act of 1970 was modified and the Schedule so modified contains provisions for a surcharge on income-tax. It is significant that section 2 of the Finance Act of 1971 speaks only of income-tax and not of any surcharge. It is only in the modifications made in the Schedule to the Finance Act of 1970 that there is provision for a surcharge. The above legislative history of the Finance Acts, as also the practice, would appear to indicate that the term "income- tax" as employed in section 2 includes surcharge as also the special and the additional surcharge whenever provided which are also surcharges within the meaning of article 271 of the Constitution. The phraseology employed in the Finance Acts of 1940 and 1941 showed that only the rates of income-tax and super-tax were to be increased by a surcharge for the purpose of the Central Government. In the Finance Act of 1958, the language ITAs No. 3892&4516/Mum/2011, 3789& 3811/Mum/2012 used showed that income-tax which was to be charged was to be increased by a surcharge for the purposes of the Union. The word "surcharge" has thus been used to either increase the rates of income-tax and super-tax or to increase these taxes. The scheme of the Finance Act of 1971 appears to leave no room for doubt that the term "income-tax" as used in section 2 includes surcharge. According to article 271, notwithstanding anything in articles 269 and 270, Parliament may at any time increase any of the duties or taxes referred to in those articles by a surcharge for the purposes of the Union and the whole proceeds of any such surcharge shall form part of the consolidated fund of India. Article 270 provides for taxes levied and collected by the Union and distributed between the Union and the States. Clause (1) says that taxes on income other than agricultural income shall be levied and collected by the Government of India and distributed between the Union and the ITAs No. 3892&4516/Mum/2011, 3789& 3811/Mum/2012 States in the manner provided in clause (2). Article 269 deals with taxes levied and collected by the Union but assigned to the States. The provisions of article 268 which is the first one under the heading "Distribution of revenue between the Union and the States" relate to duties levied by the Union but collected and appropriated by the States. Thus, these articles deal with the levy, collection and distribution of the proceeds of the taxes and duties mentioned therein between the Union and the States. The legislative power of Parliament to levy taxes and duties is contained in articles 245 and 246(1) read with the relevant entries in List I of the Seventh Schedule. As mentioned before, the legislative entry 82 in List I relates to taxes on income other than agricultural income; income- tax, super-tax and surcharge would all fall under this entry. It is in exercise of the legislative power conferred by that entry that the Union Parliament enacts the provision in the Finance Act each year ITAs No. 3892&4516/Mum/2011, 3789& 3811/Mum/2012 relating to them. It is that Act which authorises these taxes to be charged and prescribes the rates at which they can be charged. Section 4 of the Act simply provides that where any Central Act enacts that income-tax shall be charged for any assessment year at any rate or rates income-tax at that rate or those rates shall be charged in accordance thereto and subject to the provisions of the Act. Section 95, which was omitted by the Finance Act of 1965, contained similar provision with regard to super-tax. Although under the Act section 4 is the charging section yet income-tax can be charged only where the Central Act which, in the present case, will be the Finance Act, enacts that income-tax shall be charged for any assessment year at the rate or rates specified therein. The distinction made by the High Court that the surcharge are levied only under the Finance Act and income-tax under the Act may not hold good if the above view which has been pressed on behalf of the revenue were to be accepted. In our ITAs No. 3892&4516/Mum/2011, 3789& 3811/Mum/2012 judgment it is unnecessary to express any opinion in the matter because the essential point for determination is whether surcharge is an additional mode or rate for charging income-tax. The meaning of the word "surcharge" as given in the Webster's New International Dictionary includes, among others, "to charge (one) too much or in addition................"; also "additional tax". Thus, the meaning of surcharge is to charge in addition or to subject to an additional or extra charge. If that meaning is applied to section 2 of the Finance Act, 1963, it would lead to the result that income-tax and super-tax were to be charged in four different ways or at four different rates which may be described as : (i) the basic charge or rate (In Part I of the First Schedule); (ii) surcharge ; (iii) special surcharge ; and (iv) additional surcharge calculated in the manner provided in the Schedule. Read in this way, the additional charges form a part of the income-tax and super-tax. It is ITAs No. 3892&4516/Mum/2011, 3789& 3811/Mum/2012 possible to argue, and that argument has been commended on behalf of the revenue, that the word "surcharge" has been used in article 271 for the purpose of separating it from the basic charge of a tax or duty for the purpose of distributing the proceeds of the same between the Union and the States. The proceeds of the surcharge are exclusively assigned to the Union. Even in the Finance Act itself it is expressly stated that the surcharge is meant for the purpose of the Union.” Taking the same analogy and respectfully following Hon’ble Supreme Court, we are of the view that education-cess is part of the Income tax and cannot be allowed as deduction. This additional ground raised by assessee is dismissed.

12. The only issue in Revenue’s appeal in for AY 2007-08 is against the order of CIT(A) allowing the claim of deduction ignoring the provisions of section 80IA(4)(iv) ignoring the requirement of setting off of loss of earlier years with the current year’s income. For this Revenue has raised the following ground: - “1. On the facts and in the circumstances of the case and in law, the ITAs No. 3892&4516/Mum/2011, 3789& 3811/Mum/2012 learned CIT(A) erred in allowing assessee’s claim of deduction of ₹ 1,08,95,414/- under Section 80IA(4)(iv) ignoring the requirement of setting off the loss of earlier year with the current year’s income. The Ld. CIT(A)’s decision also violates the basic principal of sub section (5) of the Act which stipulates that assessee’s eligible business should be the only source of revenue. This condition further stipulates that it is also applicable for the previous year relevant to the initial assessment year for which the deduction is to be made.”

13. We noted that the only issue is as regards to initial assessment year for the purpose of allowing deduction under section 80IA of the Act in regard to this which year is to be considered as first year in which the assessee exercise its above claim of deduction under section 80IA of the Act that assessment year 2005-06 and not the first year in which the unit started generating powers that i.e. AY 2000-01. The facts are that the assessee installed Windmill at Village Vankusawade, District Satara, Maharashtra and the same qualifies as power generating unit keeping in view of the ITAs No. 3892&4516/Mum/2011, 3789& 3811/Mum/2012 provisions of section 80IA(4)(iv) of the Act. The said Wind Farm was commissioned in September, 1999 and the assessee as per the provisions of section 80IA of the Act claimed deduction at the option of the assessee for the first time in AY 2005-06. He stated that as per the provisions of section 80IA(2) of the Act, the deduction under section 80IA is available at the option of the assessee for any ten consecutive assessment years out of the 15 years beginning from the year in which the unit begins to generate power. The assessee contended that assessee has not opted to claim deduction under 80IA of the Act for the first five years actually and factually, the assessee had exercised the option to claim deduction under section 80IA of the Act for the first time in AY 2005-06 which is initially assessment year in term of the section. The CIT(A) following the decision of Hon’ble Madrass High court in the case of Velayuthasamy Spinning Mills (P) Ltd., Vs ACIT (2010) 231 CTR 368 allowed the claim of the assessee by observing in para 5 as under: - “5. I have carefully considered the above submissions of the Ld. Counsel of the appellant and the facts of the case. Section 80IA has bene amended by the Finance Act, 1999 w.e.f 1/4/2000. Prior to its amendment, for the purpose of this section, “initial assessment year” was defined as “in the case of an industrial ITAs No. 3892&4516/Mum/2011, 3789& 3811/Mum/2012 undertaking or ..means the assessment year relevant to the previous year in which the industrial undertaking begins to manufacture or produce articles or things…..” However, post the amendment of section 80IA vide finance Act 1999, the term “initial assessment year” has not been defined in the Act. In the judicial precedent relied on by the appellant, the Hon’ble High court has held that the first assessment year in which the taxpayer opts to claim the deduction would be the ‘the initial Assessment Year’ from when the eligible business would be treated as the only source of income of the taxpayer. Further, in computing profits qualifying for the deduction in the initial assessment year, the taxpayer is not required on current assessment year on the current year profit. Accordingly, we allow the claim of the assessee. In the instant case, the appellant had been setting off the loss against the income of the earlier years. Accordingly, there is no question of notionally bringing ITAs No. 3892&4516/Mum/2011, 3789& 3811/Mum/2012 forward and setting off the same against the current year’s income from the units for which the assessee is claiming deduction under section 80IA. On a careful examination of the facts and circumstances of the case and the judicial precedent relied on by the appellant, it is the apparent that the facts in the said case and in the appellant’s case are same. I have considered the issue, since the facts are identical to that of AY 2006-07, following the decision of the Madras High Court in the case of Velayudhaswamy Spinning Mills (P) Ltd. [231 ITR 368] and my own order for AY 2006-07, this ground of appeal is allowed.”

14. We noted that the Revenue has now only relied on the assessment order and no arguments were made. We noted that even this issue is covered by the CBDT Circular No 1/2016 dated15.02.2016, wherein the initial assessment order is defined. Even this provision is interpreted by the Hon’ble Supreme Court in the case of Velayudhaswamy Spinning Mills (P) Ltd. which has affirmed the decision of Hon’ble Madrass High court in Velayudhaswamy Spinning Mills (P) Ltd. (supra). Hence, we are of the view that the CIT(A) has rightly allowed the claim ITAs No. 3892&4516/Mum/2011, 3789& 3811/Mum/2012 of the assessee and we upheld the same. This issue of Revenue’s appeal is dismissed.

15. The first common issue in these cross appeals of assessee and Revenue in ITAs No 3789 & 3811/Mum/2012 for AY 2008- 09 is as regards to the computation of disallowance of expenses relatable to exempt income under section 14A of the Act read with Rule 8D of the rules. For this assessee has raised the following grounds: - “Disallowance under section 14A of the Income Tax Act, 1961 (‘the Act’) : ₹ 97,63,086/- 1.1 The CIT(A) erred in confirming the action of the AO in applying the provisions of Rule 8D and holding that the entire expenses are disallowance under section 14A of the Act as expenses incurred for earning exempt income. 1.2 The CIT(A) failed to appreciate that the disallowance made in the return of income was sufficient and no further disallowance was called for. 1.3 The CIT(A) failed to appreciate that the provisions of sub section (2) and (3)

ITAs No. 3892&4516/Mum/2011, 3789& 3811/Mum/2012 of section 14A as well as Rule 8D would apply only if the AO is not satisfied with the disallowance made by the Appellant. 1.4 The CIT(A) has erred in ignoring the contention of the appellant that even if disallowance is to be made as per Rule 8D, the same ought to be computed only on those investments which have yielded exempt income during the relevant previous year.” The Revenue has raised the following grounds: - “

2(A) On the facts and in the circumstances of the case and in law, the Ld. CIT(A) erred in directing the AO to exclude interest on Buyers credit, discounting charges and interest on vehicle loan from total interest payment for calculating disallowance under Rule 8D as not related to earning of tax exempt income, when Rule 8D is a formula, which does not allow any such exclusions. (B) on the facts and in the circumstances of the case and in law, the Ld. CIT(A) in remitting the file to the AO ITAs No. 3892&4516/Mum/2011, 3789& 3811/Mum/2012 to examine the claim of the assessee on account of interest on Buyers credit, Discounting charges and interest on vehicle loan undermining the Finance Act, 2001 effected from 01.06.2001 withdrawing the power of CIT to set aside.”

16. Briefly stated facts are that the assessee earned exempt income to the extent of 5,23,780/-. The AO noted that the assessee has made suo moto disallowance on account of administrative expense at ₹1,86,718/-. But the AO has not accepted the computation of the assessee and resort to the Rule 8D(2)(ii) for disallowance of interest and he disallowed a sum of ₹88,34,233/-. The AO also computed the administrative expense disallowance i.e. amount equal to 0.5% of the average value of investment at ₹11,15,571/- and thereby made total disallowance at ₹99,49,804/- instead of suo moto disallowance made by the assessee at ₹1,86,718/-. Aggrieved assessee came in appeal before CIT(A).

17. The CIT(A) confirmed the action of the AO in applying Rule 8D(2)(ii) & (iii) of the rules in regard to computation of disallowance of expenses relatable to exempt income and finally partly allowed the disallowance by observing in Para 5 as under: - ITAs No. 3892&4516/Mum/2011, 3789& 3811/Mum/2012 “The assessee has also claimed in its submissions that it has paid interest on buyers credit ₹53,54,259/- and discounting charges ₹ 15,73,45,096/-. It is explained that when the suppliers extend the credit extra interest is paid, which is known as interest on buyer credit and it has nothing to do with the investment activity. Similarly, discounting charges are related to the credit facility availed by the assessee through bill of exchange from its creditors and, therefore, it is claimed that it also has nothing to do with the investment activity. Similarly, assessee has also claimed that it has paid interest on vehicle loan ₹ 5,25,527/- which could neither have been utilized for any other purpose nor relates to investment activity directly or indirectly. Therefore, AO is directed to examine the claim of the assessee with regard to these three items of interest and if it is found that they are not related to the investment activity but directly related to other business activities, then exclude them from the interest taken for ITAs No. 3892&4516/Mum/2011, 3789& 3811/Mum/2012 calculating the disallowance under Rule 8D Accordingly, the ground of appeal is partly allowed.” Aggrieved, both Revenue and assessee came in appeal before Tribunal.

18. We have heard rival contentions and gone through the facts and circumstances of the case. As regards to the disallowance of interest expenditure under Rule 8D(2)(ii) being an amount of ₹88,34,233/- computed by the Assessing Officer. The learned Counsel for the assessee stated that the assessee’s own funds as on 31.03.2008 is amounting to ₹174.78 crores on account of reserve and surplus and share capital whereas, investment capable of yielding tax free income amounting to ₹22.3 crores and hence, presumption is that the entire investment has been made out of own funds and not out of borrowing. The learned Counsel for the assessee relied on the decision of Hon’ble Bombay High Court in the case of CIT vs. HDFC Bank Ltd. (2014) 366 ITR 505 (Bom). The facts and circumstance are exactly identical what to AY 2007-08, hence this interest disallowance cannot be sustained and we delete the same.

19. Coming to disallowance under Rule 8D(2)(iii), being administrative expenses, the AO computed disallowed at ₹11,15,571/- as against suo moto disallowance computed by ITAs No. 3892&4516/Mum/2011, 3789& 3811/Mum/2012 the assessee at ₹1,86,718/-. The learned Counsel for the assessee stated that during the year the assessee has received tax free income only from UTI bonds and other investment having no tax free income and hence, disallowance ought to have computed only to the extent of investment made in UTI bonds and not to be computed on other investments of the assessee which have not yielded any tax free income during the relevant year. The learned Counsel for the assessee before us made only request that the AO can be directed to compute the disallowance of expenses relatable to exempt income only qua the investments giving rise to exempt income. For this proposition, the learned Sr. Departmental Representative also agreed.

20. After hearing both the sides and going through the facts of the case, we direct the AO to include the investments for the disallowance of expenses under Rule 8D(2)(iii) to the extent of investments which give rise to exempt income only. We direct the AO accordingly. This issue on these appeals of assessee as well as Revenue is allowed as indicated above.

21. The next issue in this appeal of assessee in for AY 2008-09 is as regards to the disallowance of commission expenses amounting to ₹10,92,49,857/-. For this assessee has raised the following ground No. 2.1 as under: - ITAs No. 3892&4516/Mum/2011, 3789& 3811/Mum/2012 “2.1 The CIT(A) erred in confirming the action of the AO in disallowing the commission expense amounting to ₹10,92,49,857/- on the ground that the said expenses were not claimed by way of revised return.”

22. Both sides conceded that the facts and circumstances are exactly identical in AY 2007-08 decided above. As the facts and circumstances are exactly identical in this year also, we set aside this issue to the file of the AO for fresh adjudication in term of the decision for AY 2007-08 above. This issue of assessee’s appeal is allowed for statistical purposes.

23. The next issue in this appeal of Revenue in ITA No. 3811/Mum/2012 for AY 2008-09 is as regards to the order of CIT(A) allowing claim of deduction under section 80IA(4)(iv) of the Act not setting of losses of earlier years with current years’ income. For this Revenue has raised the following ground No. 3: - “3. (A) On the facts and in the circumstances of the case and in law, the Ld. CIT(A) erred in allowing assessee’s claim of deduction of ₹1,39,36,154/- under section 80IA(4)(iv) ignoring the requirement of setting off the loss of ITAs No. 3892&4516/Mum/2011, 3789& 3811/Mum/2012 earlier year with the current year’s income. (B) The ld. CIT(A)’s decision also violates the basic principle of Sub section (5) of the Act which stipulates that assessee’s eligible business should be the only source of revenue. This condition further stipulates that it is also applicable for the previous year relevant to the initial assessment year for which the deduction is to be made.”

24. We noted that the issue is squarely covered in favour of assessee hence, consistently following the earlier year order for AY 2007-08 decided above, we confirm the order of CIT(A) and dismiss this issue of Revenue’s appeal.

25. The next issue in this appeal of Revenue for AY 2008-09 is as regards to the charging of interest under section 234B of the Act. For this Revenue has raised the following ground No. 4: -

4. On the facts and in the circumstances of the case and in law, the Ld. CIT(A) erred in directing the AO to recalculate the interest under section 234B by reducing interest paid as part of ITAs No. 3892&4516/Mum/2011, 3789& 3811/Mum/2012 self-assessment tax under section 140A, ignoring the provisions of law that interest under section 234B should be calculated on the amount that falls short of assessed tax.”

Particulars Amount ₹ Tax on Total Assessed Income 384,420,495 Add: Surcharge @ 10% 38,442,050 Add: Education cess @ 2% 10,85,205 Total Tax 435,548,421 Less: Tax deducted at Source 12,121,664 Less: Advance tax paid 342,000,000 ITAs No. 3892&4516/Mum/2011, 3789& 3811/Mum/2012 Shortfall in assessed tax 81,426,757 Further, in the said assessment order, interest under section 234B has been computed as shown below:

Amount ₹ Period No. of Months Interest ₹ From To 81,426,757 Apr 08 May 08 2 1,628,535 36,897,748 May 08 Jan 10 20 7,379,550 16,777,298 Jan 10 Dec 10 11 1,845,503 10,858,587 The amount of Rs.36,897,748/- is calculated as under:

Particulars Amount ₹ Amount ₹ A) Shortfall in assessed tax 81,426,757 B) Self-Assessment tax paid on 30 May 2008 52,000,000 Less : C) Interest as per assessment order Under Section 234B for 2 months 1,628,535 Under section 234C 5,842,456 7,470,991 D: BC 44,529,009 Balance payable 36,897,748 The amount of ₹16,777,298 is calculated as under:

Particulars Amount ₹ Amount ₹ A) Balance payable (as calculated above) B) Self-assessment tax paid on 29th 36,897,748 January 2010 27,500,000 Less: C) Interest under section 234B for 20 months as per assessment order 7,379,550 D: B-C 20,120,450 Balance Payable (A-D) 16,777,298 In this regard we noted that as per the provisions of section 234B(2)(i), only the amount of interest paid as part of the self- assessment tax paid, ought to be reduced from tax paid under ITAs No. 3892&4516/Mum/2011, 3789& 3811/Mum/2012 section 140A while computing the interest under section 234B. The said view is also upheld in the case of Hind Rectifiers Limited vs. Deputy Commissioner of Income-tax. The correct working of interest under section 234B is as shown below: