TMI Blog2021 (9) TMI 363X X X X Extracts X X X X X X X X Extracts X X X X ..... ues 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. The Hon ble High Court further held that once the cheque issued by the assessee is encashed, the payment relates back to the date of receipt of the cheque. We are of the view that the relevant date to be considered for the purpose of section 36(1)(va) of I.T. Act is the date of deposit of cheque in the bank, and not the date of clearance of the cheque. Consequently, we hold that the aforesaid amount as allowable under section 36(1)(va) of I.T. Act. Accordingly, we direct the Assessing Officer to allow the aforesaid amount - Assessee app ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... olding that the corresponding deposits in ESI and PF towards Employees Contribution amounting to a total of aforesaid ₹ 5,76,522/- were made after the due date specified in section 36 (1)(va) of IT Act. It was explained by the assessee before the Assessing Officer that the payments were made by cheque well in time with regard to the due date prescribed under section 36(1)(va) of IT Act. However, the clearance of the cheques took a few days. In substance, the Assessee explained to the Assessing Officer that the assessee had deposited the payments by cheque in time and the delay on account of the clearance of the cheque should be ignored. The Assessee s contention before the Assessing Officer was that the date of deposit of cheque in t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 8 days, as a result of which date of clearance of cheques in some instances was after the due date. The Ld. AR contended that the additions should be deleted as the cheques were already deposited within due date in the bank alongwith relevant challans. The Ld. Senior Departmental Representative ( Ld. Sr. DR , for short) relied on the orders of the Assessing Officer and the Ld. CIT(A). (E) We have heard both sides and perused the materials available on record. The facts were not in dispute. There is no dispute that the cheques alongwith relevant challans in respect of the aforesaid amount totalling ₹ 5,76,522/- were already deposited by the assessee in bank well before the due date prescribed under section 36(1)(va) of I.T. Act. It ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ondent/assessee is a company engaged in the business of home finance. The assessee filed return of income for the assessment year 2009-2010 admitting ₹ 29,44,58,482/- as its total income. The Assessing Officer completed the assessment under Section 143(3) of the Income Tax Act and disallowed a sum of ₹ 13,85,199/- applying the provisions of Section 14A of the Act read with Rule 8D of the Income Tax Rules. The Assessing Officer also charged a sum of ₹ 28,80,680/- as interest under Section 234C of the Act. 2.2 Aggrieved by the said order, the assessee preferred an appeal to the Commissioner of Income Tax (Appeals), who partly allowed the appeal. With regard to the plea of the assessee regarding charging of interest und ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... itor may consider it as waste paper and resort to his original demand: (Stedman v. Gooch, ((1791) 1 Esp 5). It is said in Benjamin on Sale, 8th Edn. p. 788: 'The payment takes effect from the delivery of the bill, but is defeated by the happening of the condition i.e. nonpayment at maturity.' In Byles on Bills, 20th Edn., p. 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 Edn. Vol. I, p. 342. In Felix Hadley Co. v. Hadley, (1892) 2 Ch D 680 Byrne, J. expressed the same idea in the following passage in his judgment at p. 682: 'In this case I think what took place amounted to ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... heques were accepted unconditionally as payment and on another view, even if the cheques were taken 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. (emphasis supplied) 6. The above said view of the Supreme Court was reiterated by a recent decision of the Supreme Court in Director of Income Tax v. Raunaq Education Foundation, (2013) 2 SCC 62 = 2013-TIOL-01-SC-IT. 7. It is not the case of the department that the cheque issued by the assessee was dishonourned. Once the cheque issued by the assessee is encashed, in the light of the decisions referred ..... X X X X Extracts X X X X X X X X Extracts X X X X
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