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TMI Blog2011 (6) TMI 555X X X X Extracts X X X X X X X X Extracts X X X X ..... d the cheques in the bank within time. 2). The learned CIT (A) has erred in relying judgment which were relating to the period in which the Central Government Treasury rules were in operation. These rules were replaced by Central Government Account (Receipts and Payments) rules, 1983. 3). The learned CIT(A) has erred in relying upon the CBDT Circular which was issued when Central Government Account (Receipts & Payments) Rules, 1983 were not operative. 4). The learned CIT(A) has failed to appreciate that the Chennai Bench of ITAT has held in favour of the department in the case of burametalic Sunmar Limited (ITA 1437/Mad/2000) on the same issue. 3. Brief facts of the case are as follows:- &n ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ar No.261 dt.08.08.1979 clarifying that the date of payment would relate back to the date of presentation of the cheque if the cheque is honoured on presentation has not been withdrawn and continues to hold the field and based on the Supreme Court decision in Ogale class Works (supra), I unhesitatingly uphold the appellant's stand on this issue'. 6. The revenue being aggrieved is in appeal before us. 7. The learned supported the order of the AO whereas the learned AR reiterated the submissions made before the Income Tax Authorities and also relied on the decision of the Bangalore Bench of the Tribunal in the case of M/s GE Medical Systems (India) Pvt. Ltd. vide order dated 25.6.2010. 8. We have heard the rival submissions and perused the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ted bank. Upon tendering of a cheque, if it is not dishonored later, it shall be deemed that payment has been made on the date when it was handed over to the government's bankers. The Hon'ble Supreme Court in the case of K Saraswatty v P 5 5 Somasundaram Chettiar (1989) 4 5CC 527 while dealing with a case u/s 10 and 82 of the Negotiable Instruments Act, 1881 has held that payment by cheque should be taken to be due payment if the cheque is subsequently encashed in the ordinary course. The Hon'ble Madras High Court in the case of CIT v Kumudam Publications (P) Ltd. (1981) 128 ITR 617 decided on 1.9.1980 while dealing with the payment of advance tax under the Income Tax Act, 1961 has held that " In view of the Treasury Rules when cheques wer ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r 15, 1974, it was not entitled to any interest u/s 214. According to the Appellate Assistant Commissioner, the date of handing over the cheque to the Income Tax Officer was not relevant for the purpose of granting interest u/s 214, but the relevant date was the date of encashment viz. September 25, 1974. So holding, the Appellate Assistant Commissioner rejected the appeal of the assessee. Against the order of the Appellate Assistant Commissioner, the assessee preferred an appeal before the Tribunal. The Tribunal upheldthe claim ofthe assessee. 6.5 The Hon 'ble High Court affirmed the view of the Tribunal by holding thus:- "So far as the first question is concerned, a similar question came up for consideration before this Court in CIT v P ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... interest u/s 234C of the Act. 8. In the result, the appealfiled by the assessee is allowed' 8.1 in the instant case, admittedly, the cheques were presented and deposited before the authorized banker within the due date of payment of advance tax. Cheques were admittedly encashed and amounts were realized subsequently. It is not the case of the revenue that the cheques were returned unpaid at any point of time. Therefore, the facts being identical to the facts in the case of M/s GE Medical Systems (India) Pvt. Ltd. (supra), we uphold the order of the CIT (A) and dismiss the appeal filed by the department. 9. In the result, the appeal filed by the revenue is dismissed. 10. The assessee has filed cross objection along with the ..... X X X X Extracts X X X X X X X X Extracts X X X X
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