Tds on recovery of excess salary paid last year

Dear All,

I seek your expert opinion on the following ticklish issue that I am facing currently:

Facts : An employee was paid excess salary  (of Rs. 2,00,000 ) than what he is entitled    during the FY 2011-12.

He come under 30% slab for TDS purposes

The error is noticed and recovery process is initiated.

Question : If I recover the entire 2 lacs in two instanlments in the next two months through his salary (being processed by a Payroll processing vendor) can this recovery amount be adjusted against his current income of the year and tax the balance income for TDS purposes u/s 192?

 Your quick opinion (with a refernce to the relevant sections/ rules/ circulars/ case laws if any ) on this would help me to resolve the issue quickly.

Thanks & Regards,