Judgment V.Ramaswami, J. 1. For the assessment year 1951-52 the assessee claimed that out of the overdrafts taken by him from the Banks, he had utilised a sum of Rs. 2,00,000.00 for an advance payment of income-tax under Sec.18A of the Income-tax Act and that the interest paid on the overdraft must be allowed as an expense. The Income-tax Officer refused to allow the deduction and on appeal the order of the Income-tax Officer was affirmed by the Appellate Assistant Commissioner. The assessee took the matter on appeal to the Income-tax Appellate Tribunal. The appeal was dismissed by the Appellate Tribunal on the ground that the interest paid for borrowing money for the purpose of meeting tax liability cannot be a legitimate deduction. In these circumstances the Income-tax Appellate Tribunal has submitted the following question of law for the determination of this High Court : "Whether the interest paid by the assessee on money borrowed for paying tax under Sec.18A of the Indian Income-tax Act is an allowable deduction?" 2. On behalf of the assessee learned counsel put forward the argument that the interest received by the assessee on the advance payment of tax under Section 18A was a taxable income and on the same reasoning the interest paid by the assessee for borrowing the amount to pay the tax was a legitimate deduction. The claim of the assessee was based upon Sec.12(2) of the Income-tax Act, which is to the following effect : "12 (2). Such income, profits and gains shall be computed after making allowance for any exnenditure (not being in the nature of capital expenditure) incurred solely for the purpose of making or earning such income, profits or gains and further in the case of any income by way of dividend, for any reasonable sum paid by way of commission or remuneration to a banker or any other person realising such dividend on behalf of the assessee......". Learned counsel for the assessee also referred in this connection to the decision of the Supreme Court in Eastern Investments Ltd. V/s. Commissioner of Income-tax, West Bengal, 1951-20 ITR 1 : ( AIR 1951 SC 278 ), where it was observed that "it is enough to show that the money was expended not of necessity and with a view to a direct and immediate benefit to the trade, but voluntarily and on the ground of commercial expediency, and in order indirectly to facilitate the carrying on of the business." In my opinion, the argument of learned counsel for the assessee is misconceived and cannot be accepted as correct. It is a well established proposition that the amount of income-tax paid by an assessee cannot be deducted as a business expenditure. The reason is that income-tax is not a deduction before you arrive at the net profits of the assessee. It is said in an English case that Income-tax represents "the Crowns share of the profits". It is not an, expenditure for the purpose of earning profits. It is, on the contrary, a case of application of profits after they have been earned and not expenditure necessary to earn such profits. That is the principle laid down by the House of Lords in Ashton Gas Company V/s. Attorney-General, (1906 AC 10) and at page 12 the Lord Chancellor states in the course of his speech as follows : "My Lords, so presented the case appears to me to be perfectly clear. The fallacy has been in arguing as if you can deduct from the income-tax which you have got to pay something which alters what is the real nature of the profit. Now the profit upon which the income-tax is charged is what is left after you have paid all the necessary expenses to earn that profit. Profit is a plain English word; that is what is charged with income-tax. But if you confound what is the necessary expenditure to earn that profit with the income-tax, which is a part of the profit itself, one can understand how you get into the confusion which has induced the learned counsel at such very considerable length to point out that this is not a charge upon the profits at all. The answer is that it is. The answer is that it is. The income-tax is a charge upon the profits; the thing which is taxed is the profit that is made, and you must ascertain what is the profit that is made before you deduct the tax --you have no right to deduct the income-tax before you ascertain what the profit is. I cannot understand how you can make the income-tax part of the expenditure. I share Buckley, J.s difficulty in understanding how so plain a matter has been discussed in all the Courts at such extravagant length." The same view has been taken by Finley, J. in Alleft V/s. Farquharson Brothers and Co., (1932) 17 Tax Gas 59 at p. 63. An identical principle has been expressly embodied in Sec.10(4) of the Income-tax Act, which states as follows : "Nothing in Clause (ix) or Clause (xv) of Sub-section (2) shall be deemed to authorise the allowance of any sum paid on account of any cess, rate or tax levied on the profits or gains of any business, profession Or vocation or assessed at a proportion of or otherwise on the basis of any such profits or gains; ......." In view of the statutory provisions it follows as a necessary corollary that a deduction of interest on money borrowed for payment of tax is not a legitimate deduction, and the claim put forward on be-half of the assessee for deducting such interest can-not be allowed. 3. There is also another point of view from which the question can be approached. It is true that under Sub-section (5) of Sec.18A of the Income-tax Act the Central Government is bound to pay simple interest at two per cent per annum on any amount payable before the 1st of April, 1955, and four per cent per annum on any amount payable after that date. But the purpose of the assessee in making an advance payment of tax under Sec.18A is not to earn the statutory rate of interest under Sub-section (5) of Sec.18A; on the contrary, the object of the assessee in making the advance payment is to discharge the statutory obligation imposed upon the assessee by Sub-section (1) of Sec.18A, which is to the following effect; "18A. (1) (a) In the case of income in respect of which provision is not made under Sec.18 for deduc tion of income-tax at the time of payment, the Income-tax Officer may, on or after the 1st day of April in any financial year, by order in writing, require an assessee to pay quarterly to the credit of the Central Government on the 15th day of June, 15th day of September, 15th day of December and 15th day of March in that year, respectively, an amount-equal to one-quarter of the income-tax and super-tax payable on so much of such income as is included in his total income of the latest previous year in respect of which he has been assessed, if that total income exceeded the maximum amount not chargeable to tax in his case by two thousand live hundred rupees. Such income-tax and super tax shall be calculated at the rates in force for the financial year in which he is required to pay the tax, and shall bear to the total amount of income- tax and super-tax so calculated on the said total in come the same proportion as the amount of such inclusions bears to his total income or, in cases where under the provisions of Sub-section (1) of Sec.17 both income-tax and super-tax or super-tax are charge able with reference to the total world income, shall bear to the total amount of income-tax and super tax which would have been payable on his total world income of the said previous year had it been his total income the same proportion as the amount of such inclusions bears to this total world income; x x x x It is manifest "that the receipt of interest by the assessee under Sec.18A, Sub-section (5), is purely incidental. I am satisfied that the borrowing of money by the assessee for the payment of an advance tax was not made for any purpose of commercial expediency but for the discharge of a statutory obligation imposed upon the assessee. It follows, therefore, that the interest paid by the assessee on the money borrowed cannot be deducted under the provisions of Sec.12(2) of the Income-tax Act. It follows, therefore, that the interest paid by the assessee on the money borrowed cannot be deducted under the provisions of Sec.12(2) of the Income-tax Act. This view is borne out by a decision of the Bombay High Court in Aruna Mills, Ltd., Ahmedabad V/s. Commissioner of Income-tax, Bombay, 1957-31 ITR 153 : ( AIR 1956 Bom 756 ), where it is pointed out that the interest which an assessee has to pay under Sub-section (7) of Sec.18A for having under-estimated the tax payable by him by way of advance tax and the interest payable to him by the Government under Sub-section (5) of the same section in respect of tax paid in advance, do not arise out of the same transaction; the interest payable by the assessee under Sub-section (7) cannot, therefore, be deducted from the amount of interest received by him under Sub-section (5) in determining his assessable income. Nor can the interest payable by him under Sub-section (7) be claimed as business expenditure under Sec.10(2)(xv) of the Act, or on the general principles of commercial expediency. A similar view has been expressed by the Bombay High Court in Bai Bhuri-ben Lallubhai V/s. Commissioner of Income-tax, Bombay, North Cutch and Saurashtrav 1956-29 ITR 543 : ( AIR 1956 Bom 41 ), where the assessee claimed to deduct under Sec.12(2) of the Income-tax Act from interest earned by her from fixed deposit the interest on money borrowed by her for the purpose of meeting household expenses, purchasing jewellery and meeting advance payment of tax. It was held by Chagla, C. J. that the purpose for which the assessee borrowed money had no connection, whether direct or indirect, with the income which she earned from the fixed deposit and that she was not entitled to the deduction, claimed under Sec.12(2). It might be that the assessees motive was to save her fixed deposit and interest and to meet household expenses etc., by means of a Joan borrowed, but that consideration was entirely irrelevant. Even as regards advance payment of tax the purpose of borrowing the money in order to pay advance tax was to discharge the statutory obligation upon the assessee, that receipt of interest on that tax was purely incidental and, therefore, the assessee could not claim the deduction on that ground either. Even as regards advance payment of tax the purpose of borrowing the money in order to pay advance tax was to discharge the statutory obligation upon the assessee, that receipt of interest on that tax was purely incidental and, therefore, the assessee could not claim the deduction on that ground either. A similar view has been taken by a Bench of this High Court in a previous case of the same assessee, Kameshwar Singh V/s. Commissioner of Income-tax, B, and Order, (1957) 32 ITR 377 at p. 387 : ( AIR 1957 Pat 400 at p. 403). For the reasons expressed by me, I hold that the assessee is not entitled to a deduction of the amount of interest paid by him for the money borrowed for payment of the advance income-tax tinder Sec.18A. Accordingly I answer the question of law referred to the High Court by the Income-tax Appellate Tribunal in favour of the Income-tax Department and against the assessee. The assessee must pay the cost of this reference. Hearing fee Rs. 250/-. Kanhaiya Singh, J. 4 I agree.