TMI Blog2013 (1) TMI 239X X X X Extracts X X X X X X X X Extracts X X X X ..... the cheque was given. Had the cheque been dishonoured, things would have been different but as the cheque had been duly honoured, as laid down by this court in the case of The Commissioner of Income-Tax, Bombay South, Bombay vs. Messrs. Ogale Glass Works Ltd., Ogale Wadi (1954 (4) TMI 3 - SUPREME COURT) it will have to be presumed that the amount was paid on the date on which the cheque was given to the respondent assessee and, therefore, it cannot be said that any undue favour was done by the respondent-assessee to M/s Apollo Tyres Ltd - thus there was no violation of the provisions of Sections 13(2)(b) or 13(2)(h) - in favour of assessee.. - CIVIL APPEAL NO. 90 OF 2013 - - - Dated:- 7-1-2013 - R.M. LODHA AND ANIL R. DAVE, JJ. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... spondent-assessee had, by way of donation, received two cheques for a sum of Rs.40 lac each from M/s Apollo Tyres Ltd. One of the cheques was dated 22nd April, 2002 and yet it was given in accounting year 2001-2002 i.e. before 31st March, 2002. The said cheque for donation was received by the respondent-assessee before 31st March, 2002 but was honoured after 1st April, 2002 i.e. in accounting year 2002- 2003. 7) In the assessment proceedings, the Assessing Officer came to the conclusion that with an intention to do undue favour to M/s Apollo Tyres Ltd., the cheque dated 22nd April, 2002, given by way of donation for a sum of Rs.40 lac had been accepted by the respondent-assessee and receipt for the said amount was also issued before 31s ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... )(b) 13(2)(h) of the Act and the assessee trust had not acted in improper and illegal manner. The Tribunal noted the fact that the amount of donation i.e. Rs.40 lac received by way of a cheque dated 22nd April, 2002 was treated as donation receivable and accordingly accounting treatment was given to the said amount. The said amount was not included in the accounting year 2001-2002 as donation but was shown separately in the balance sheet as amount receivable by way of donation. Moreover, M/s Apollo Tyres Ltd. had also not availed benefit of the said amount under Section 80G of the Act during the accounting year 2001-2002 but had availed the benefit only in the accounting year 2002-2003, the period during which the cheque had been honoured ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... honoured and the amount was paid to the assessee trust, the date of payment of cheque should be treated as the date on which the cheque was given. Had the cheque been dishonoured, things would have been different but as the cheque had been duly honoured, as laid down by this court in the case of The Commissioner of Income-Tax, Bombay South, Bombay vs. Messrs. Ogale Glass Works Ltd., Ogale Wadi (1955 (1), SCR page 185), it will have to be presumed that the amount was paid on the date on which the cheque was given to the respondent assessee and, therefore, it cannot be said that any undue favour was done by the respondent-assessee to M/s Apollo Tyres Ltd. 13) Upon hearing the learned counsel for the parties, we find certain undisputed fac ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ) 1 Esp.5. It is said in Benjamin on Sale, 8th Edition, page 788 :- The payment takes effect from the delivery of the bill, but is defeated by the happening of the condition, i.e., non-payment at maturity. In Byles on Bills, 20th Edition, page 23, the position is summarised pithily as follows : A cheque, unless dishonoured, is payment. To the same effect are the passages to be found in Hart on Banking, 4th Edition, Volume I, page 342. In Felix Hadley Co. v. Hadley (L.R. (1898) 2 Ch.D.680, Byrne J. expressed the same idea in the following passage in his judgment at page 682 : In this case I think what took place amounted to a conditional payment of the debt; the condition being that the cheque or bill should be dul ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... aken conditionally, the cheques not having been dishonoured but having been cashed, the payment related back to the dates of the receipt of the cheques and in law the dates of payments were the dates of the delivery of the cheques. 15) Looking into the aforestated undisputed facts, and the view expressed by this court in the case of M/s Ogale Glass Works Ltd. (supra), we are of the view that no irregularity had been committed by the assessee trust and there was no violation of the provisions of Sections 13(2)(b) or 13(2)(h) of the Act. The fact that most of the trustees of the assessee trust and the directors of M/s Apollo Tyres Ltd. are related is absolutely irrelevant. 16) Upon careful perusal of the order passed by the Tribuna ..... X X X X Extracts X X X X X X X X Extracts X X X X
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