Aggrieved by order of CIT (Appeals) assessee-company had come up in appeal. 2. assessee is resident public company. year of assessment is 1983-84 accounting period ending on 31-8-1982. 3. Ground Nos. 1 & 2: assessee claimed Rs. 12,50,000 as revenue deduction being amount of premium @ 5 per cent payable on redemption of 15 per cent non- convertible debentures of face value of Rs. 2.5 crores issued during instant year which were due to redemption in 1989 i.e., to say after seven years. ITO held that premium payable at end of seventy year could not be regarded as expenditure relevant to instant assessment year and it could not be regarded as accrued liability of year. He, therefore, disallowed claim. CIT (Appeals) endorsed order of ITO. He also rejected alternative contention of assessee that at least 1/7th of amount of premium should be allowed in instant year. 4. Contention of learned representative for assessee is that said amount of premium is in nature of inducement to prospective subscribers and as such it partakes character of cost of borrowing. Thus, according to him it is revenue expenditure and as such is allowable in instant year. Alternatively, it is urged by him that amount should be spread over year. He is support placed reliance upon M. P. Financial Corpn. v. CIT (1987) 165 ITR 765 (MP). Learned departmental representative, on other hand, supported orders of tax authorities below. 5. M. P. Financial Corpn.'s case (supra) was case of issue of bonds at discount. It has been observed by Hon'ble High Court that in case of issue of bonds at discount same principle as are applicable in case of issue of debentures at discount would be attracted. It is to be further seen that same principle would be applicable in case of issue of debentures repayable at premium or debentures issued at discount and repayable at premium. In this connection, following is stated in Spicer & Pegler's Book Keeping and Accounts (Seventeenth Edition) at page-240: "Debentures repayable at premium These debentures will stand in Balance-Sheet as liability at their nominal amount, with note of amount at which they are repayable, any discount or premium on issue being treated as described above. If sinking fund is raised to provide for repayment it should include provision for payment of premium on redemption. If no sinking fund is created, premium should be provided for out of profits over period of debentures. Debentures may even be issued at discount and repayable at premium." 6. We, therefore, hold that amount of premium of Rs. 12,50,000 should b e allowed as revenue reduction over period of debentures, i.e., to say seven years and as such 1/7th of it should be allowed in instant year. 7. Ground Nos. 3 & 4: assessee by agreement dated 5.12.1979 obtained assignment of trade mark "Kleertone" together with goodwill of business attached thereto from NELCO. By another agreement of even date assessee was appointed as agents by NELCO for collecting outstanding debts of NELCO aggregating to Rs. 16 lakhs as on 31.8.1979 which related to said business of "Kleertone". assessee thereby deposited Rs. 16 lakhs with NELCO free of interest and was entitled to retain said debts collected up to 31.8.1982. In case assessee was unable to recover entire debts by 31.8.1982. In case assessee was unable to recover entire debts by 31.8.1982 it was entitled t o refund from NELCO out of said deposit of Rs. 16 lakhs but such refund was agreed to be limited to Rs. 10 lakhs. According to assessee, they could recover Rs. 3,95,717 out of total debts of Rs. 16,00,874 and out of balance of Rs. 12,05,157 NELCO promised to return Rs. 10 lakhs only. Thus, there was loss of Rs. 2,05,157 which was written off by assessee as trading loss. ITO declined claim of assessee to treat it as trading trading loss. ITO declined claim of assessee to treat it as trading loss. assessee went in appeal before CIT (Appeals) who endorsed order of ITO. He also dismissed alternative stand of assessee for treating same as bad debt. 8. We find no merit in contention of learned authorised representative that instant case should be taken on analogy of taking over predecessor's business with all its assets and liabilities. authority of CIT v. T. Veerabhadra Rao, K. Koteswara Rao & Co. (1985) 155 ITR 152 (SC) is not applicable to facts of instant case. In that case predecessor's business was taken over with all its assets and liabilities inasmuch as that debts of predecessor became assets of assessee and interest income accrued thereon was assessed in hands of assessee. In instant case, assessee took over trade mark together with goodwill of NELCO. agreements of taking over trade mark and goodwill on one hand and appointment of assessee as agents of NELCO for recovery of debts on other were though separate but they were even dated and obviously contemporaneous. There is reference of agreement of assignment of trade make and goodwill in agreement appointing assessee as agents of NELCO for recovery of debts. Moreover, assessee would not have entered into agreement of agency with NELCO on payment of Rs. 16 lakhs in advance for making recovery of debts of NELCO for recovery of debts. Moreover, assessee would not have entered into agreement of agency with NELCO on payment of Rs. 16 lakhs in advance for making recovery of debts of NELCO to tune of Rs. 16 lakhs. Taking all these circumstances together, it is evident that agency agreement obviously being unprofitable adventure, was part and parcel of agreement to take over trade mark and goodwill. Thus, consideration of agency agreement was part of agreement to take over trade mark and goodwill which was capital asset. loss thus suffered by assessee was in capital field. It is not case that assessee had taken over debts of its predecessor. assessee was merely appointed as agent for realising debts of NELCO and as such, said debts remained debts of NELCO for all time. It is also not that it was any trade agreement resulting in trade loss. As discussed above, it was agreement in conjunction with assignment of trade mark and goodwill. Thus, assessee cannot get deduction of Rs. 2,05,157 either as trading loss or as bad debt. order of CIT (Appeals) on this point is, therefore, upheld. 9. Ground Nos. 5 & 6: assessee-company was engaged in manufacture of electric fans and parts thereof. It was paying Excise Duty on basis of wholesale prices claimed and approved from time to time. However, it became intelligent after delivery of judgment by Hon'ble Supreme Court on 1.12.1972 in Voltas' case (sic.). It claimed refund of Excise DUty paid from Central Excise department and for that purpose field writ petition No. 844 of 1981 in Bombay High Court. Hon'ble High Court, inter alia, passed interim order on 29-6-1981 directing Central Excise department to deposit in Court Rs. 1,23,13,843 relating to period from 1.9.1971 to 31.3.1981 with liberty to assessee to withdraw same on furnishing to Central Excise Department bank guarantee to extent of such amount withdrawn. On appeal by Central Excise department Hon'ble High COurt by interim order dated 7-10-1981 reduced figure of Rs. 1,23,16,843 to Rs. 67 lakhs. said amount of Rs. 67 lakhs was withdrawn by assessee in November 1981 after furnishing necessary bank guarantee. It may further be noticed as the subsequent event that Hon'ble High Court by order dated 14.12.1983 directed assessee to refund Rs. 37 lakhs to Central Excise department in two equal instalments of Rs. 18.5 lakhs by 14.1.1984 and 14.3.1984 respectively. Hon'ble High Court further directed on 23.8.1985 to make further refund of Rs. 10 lakhs - Rs. 5 lakhs by 15-10-1985 and Rs. 5 lakhs by 30-11-1986 to Central Excise department. writ petition No. 844 of 1981 filed by assessee before Hon'ble Bombay High COurt in which these orders were passed is still pending. ITO treated receipt of Rs. 67 lakhs as income of assessee. On appeal by assessee CIT (Appeals) upheld order of ITO treating this amount as income of assessee under section 41(1) of Income-tax Act. 10. Contention of learned representative for assessee is that said amount cannot be treated as income since Hon'ble High Court permitted assessee to withdraw said amount on furnishing bank guarantee without making any final decision if assessee was ultimately entitled to same. Further, according to him subsequent events show that assessee was required to refund Rs. 53 lakhs out of Rs. 67 lakhs and matter is still sub- judice. He is support placed reliance upon judgment of Hon'ble Supreme Court in case of CIT v. Hindustan Housing & Land Development Trust Ltd. (1986) 161 ITR 524. 11. In reply, it is contended by learned departmental representative that said amount of Rs. 67 lakhs was in fact cash receipt and should be included in income of assessee. It is further contended by him that in event of repayment assessee can well claim it as deduction. 12. Since said amount was received by assessee on basis of ad interim order of court on furnishing bank guarantee it could not be taken s finally received by assessee. assessee was mere custodian of said amount which it was obliged to refund at any time by order of court. principle contained in Hindustan Housing & Land Development Trust Ltd.'s case (supra) is applicable to instant case. addition of Rs. 67 lakhs to income of assessee is, therefore, deleted. 17. Ground No. 10: Rs. 14,832 were deducted at source of which ITO did not allow credit on ground that said amount was not credited to Central Govt. by person deducting it. Contention of learned counsel for assessee is that since amount of tax was legally deducted ITO should have allowed credit for same. He in support relied upon judgement of Hon'ble Rajasthan High Court in case of Addl. CIT. CIT v. Farasol Ltd. (1987) 163 ITR 364. Learned departmental representative on other hand, relying upon judgement o f Hon'ble Calcutta High COurt in case of CIT v. Mahabir Finance Ltd. (1970) 75 ITR 83 contended that assessee was not entitled to credit of said deduction since amount was not credited to Central Govt. 18. None of judicial pronouncements relied upon by parties is in point. Hon'ble Rajasthan High Court in Farasol Ltd.'s case (supra) referred to section 192 to 195 in context with question which directly related to interpretation of section 40(a) (i). Hon'ble Calcutta High COurt in case of Mahabir Finance Ltd. (Supra) clearly stated that if any refund is to be made to shareholder refund would be naturally limited to amount which Central Govt. had actually received and cannot be extended to amount which Government has not receive. This observation was made by Hon'ble Mr. Justice Mitra while he was considering if dividend income received by shareholder was liable to grossed up with tax deducted at source. interpretation of section 199 which is directly in point in this case was not before Hon'ble High Court. It reads as under: "Any deduction made in accordance with provisions of section 192 to 195 and paid to Central Government shall be treated as payment of tax on behalf of person from whose income deduction was made ...." In conjunction with section 199 it is necessary to read section 237 which is as under: "If any person satisfies Income-tax Officer that amount of tax paid by him or on his behalf treated as paid by him or on his behalf for any assessment year exceeds amount with which he is properly chargeable under this Act for that year, he shall be entitled to refund of excess." Further, it is significant to note that in Form No. 19A of certificate of deduction of tax and in similar forms of certificate of deduction of tax following has been mentioned: "The amount deducted at source has been paid to credit of Central Government on .... will be paid to Central Government by ...." And above all, there is section 205 putting bar against, direct demand on assessee which mentions "where tax is deductible at source ... assessee shall not be called upon to pay tax himself to extent to which tax has been deducted from that income." It is thus abundantly clear from aforesaid provisions that assessee from whose income-tax has been deducted at source in accordance with provisions contained in Income-tax Act, he is entitled to credit of said tax irrespective of whether person deducting tax has credited same to Central Government or not. person deducting tax at source is in sense statutory agent of Central Govt. and for his default no assessee can be made to suffer. words used in section 199" and paid to Central Government". In this view of matter assessee is entitled to deduction of Rs. 14,832 as tax paid. There is no dispute that assessee has furnished necessary certificate of deduction before ITO. ITO is directed to give credit to Rs. 14,832. 19. In result appeal is partly allowed. *** RALLIS INDIA LTD. v. INCOME TAX OFFICER