diff --git a/compiler/frontend/src/org/jetbrains/kotlin/resolve/calls/tower/NewCallArguments.kt b/compiler/frontend/src/org/jetbrains/kotlin/resolve/calls/tower/NewCallArguments.kt
index 64378ed6137..9993a04de74 100644
--- a/compiler/frontend/src/org/jetbrains/kotlin/resolve/calls/tower/NewCallArguments.kt
+++ b/compiler/frontend/src/org/jetbrains/kotlin/resolve/calls/tower/NewCallArguments.kt
@@ -150,8 +150,10 @@ internal fun createSimplePSICallArgument(
     val preparedType = prepareArgumentTypeRegardingCaptureTypes(baseType) ?: baseType
 
     val receiverToCast = context.transformToReceiverWithSmartCastInfo(
-            ExpressionReceiver.create(ktExpression, preparedType, context.trace.bindingContext)
-    )
+            ExpressionReceiver.create(ktExpression, baseType, context.trace.bindingContext)
+    ).let {
+        ReceiverValueWithSmartCastInfo(it.receiverValue.replaceType(preparedType), it.possibleTypes, it.isStable)
+    }
 
     return if (onlyResolvedCall == null) {
         ExpressionKotlinCallArgumentImpl(valueArgument, context.dataFlowInfo, typeInfo.dataFlowInfo, receiverToCast)
diff --git a/compiler/testData/diagnostics/tests/smartCasts/smartCastAndArgumentApproximation.kt b/compiler/testData/diagnostics/tests/smartCasts/smartCastAndArgumentApproximation.kt
new file mode 100644
index 00000000000..cd84f8e6797
--- /dev/null
+++ b/compiler/testData/diagnostics/tests/smartCasts/smartCastAndArgumentApproximation.kt
@@ -0,0 +1,8 @@
+/*
+    Here element has type Captured(*) because of resolution for `iterator()` on this.
+    and where we resolve `destination.add(element)` we approximate element to `Any` with smart cast to `R`.
+ */
+inline fun <reified R, C : MutableCollection<in R>> Array<*>.filterIsInstanceTo(destination: C): C {
+    for (element in this) if (element is R) destination.add(<!DEBUG_INFO_SMARTCAST!>element<!>)
+    return destination
+}
diff --git a/compiler/testData/diagnostics/tests/smartCasts/smartCastAndArgumentApproximation.txt b/compiler/testData/diagnostics/tests/smartCasts/smartCastAndArgumentApproximation.txt
new file mode 100644
index 00000000000..da04b3de95c
--- /dev/null
+++ b/compiler/testData/diagnostics/tests/smartCasts/smartCastAndArgumentApproximation.txt
@@ -0,0 +1,3 @@
+package
+
+public inline fun </*0*/ reified R, /*1*/ C : kotlin.collections.MutableCollection<in R>> kotlin.Array<*>.filterIsInstanceTo(/*0*/ destination: C): C
diff --git a/compiler/tests/org/jetbrains/kotlin/checkers/DiagnosticsTestGenerated.java b/compiler/tests/org/jetbrains/kotlin/checkers/DiagnosticsTestGenerated.java
index e5e8cbcacbf..02d765a550c 100644
--- a/compiler/tests/org/jetbrains/kotlin/checkers/DiagnosticsTestGenerated.java
+++ b/compiler/tests/org/jetbrains/kotlin/checkers/DiagnosticsTestGenerated.java
@@ -20056,6 +20056,12 @@ public class DiagnosticsTestGenerated extends AbstractDiagnosticsTest {
                 doTest(fileName);
             }
 
+            @TestMetadata("smartCastAndArgumentApproximation.kt")
+            public void testSmartCastAndArgumentApproximation() throws Exception {
+                String fileName = KotlinTestUtils.navigationMetadata("compiler/testData/diagnostics/tests/smartCasts/smartCastAndArgumentApproximation.kt");
+                doTest(fileName);
+            }
+
             @TestMetadata("smartCastOnElvis.kt")
             public void testSmartCastOnElvis() throws Exception {
                 String fileName = KotlinTestUtils.navigationMetadata("compiler/testData/diagnostics/tests/smartCasts/smartCastOnElvis.kt");