1988 (11) TMI 40

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..... concerns the assessee's claim for interest under section 214 of the Income-tax Act, 1961. The assessee, Avery Freewheels (P.) Ltd., Chandigarh, is a company manufacturing cycle spare parts. An instalment of advance tax of Rs. 3,23,658 was paid by cheque on March 15, 1976. This cheque was, however, encashed only on March 20, 1976. While framing the assessment, the Income-tax Officer held that as t .....

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..... see, as the cheque had been encashed on March 20, 1976, a date which fell within the financial year, there was no reason why interest under section 214 of the Act should not be paid to the assessee. The order of the Income-tax Officer was accordingly reversed and he was directed to allow interest due to the assessee. This view was later upheld by the Tribunal observing that as the cheque had been .....

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..... the judgment of this court in Oswal Woollen Mills Ltd. v. CIT [1980] 122 ITR 789, where, following the earlier judgment of the Supreme Court in CIT v. Ogale Glass Works Ltd. [1954] 25 ITR 529, it was held that if payment by cheque is accepted and the cheque is, on presentation, encashed, the payment relates back to the date when the cheque was received. Applying this ratio to the present case, it .....

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