TaxTMI 
TaxTMI 
2006 (1) TMI 213
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....en though the return was treated as non est, the assessee is entitled to carry forward the unabsorbed depreciation. The learned representative for the assessee placed her reliance on the decision of the Mumbai Bench of this Tribunal in the case of Bombay Gas Co. Ltd. v. Dy. CIT [2004] 41 Taxman 22 and submitted that the Mumbai Bench of this Tribunal held that even non-filing of the return for earlier assessment years was of no consequence as regards the claim of carry forward of unabsorbed depreciation. The learned representative again placed her reliance on the judgment of the Punjab & Haryana High Court in the case of CIT v. Haryana Hotels Ltd. [2005] 276 ITR 521 and submitted that the carry forward unabsorbed depreciation shall be set off even though no return was filed. The learned representative has also placed her reliance on the judgment of the Supreme Court in the case of Calcutta Electric Corpn. Ltd. v. CIT [1992] 194 ITR 294. 3. On the contrary, Mr. K. Srinivasan, the learned Departmental Representative (D.R.) submitted that for the purpose of carrying forward unabsorbed depreciation and unabsorbed loss, it has to be quantified in the year in which the depreciation and....
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....njab & Haryana High Court observed that they are unable to accept the view laid down by the Madras High Court. 6. We have also carefully gone through the judgment of the Madras High Court in the case of Sri Rajarathinam Transports (P.) Ltd. The issue before the Madras High Court was whether the assessee was entitled to set off the unabsorbed depreciation of the assessment year 1960-61 in the assessment year 1963-64. The assessee before the Madras High Court filed the return of income for the assessment year 1960-61 belatedly beyond the time prescribed in sections 139(1)(a), 139(4) and 139(1)(b)(i) of the Income-tax Act. Therefore, no assessment could be made and the depreciation could not be quantified or determined. In those factual circumstances, the Madras High Court held that in the absence of the specific order of the assessing authority determining the depreciation not only for the purpose of assessment but also for its carry forward from assessment year to assessment year, the assessee could not be permitted to claim set off the unabsorbed depreciation. This judgment of the Madras High Court was not approved by the Punjab & Haryana High Court. This Bench of the Tribunal i....
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....s case is regarding the actual cost of asset. Therefore, the judgment of the Apex Court is also not applicable to the facts of this case. 9. Since, admittedly, the return was treated as non est and unabsorbed depreciation and business loss were not determined during the assessment year 1987-88, in our opinion, it cannot be carried forward and set off against the income for the assessment year 1995-96 in view of the judgment of the Madras High Court in the case of Sri Rajarathinam Transports (P.) Ltd. Moreover, it is not known whether the depreciation remains to be unabsorbed during the period 1987-88 to 1994-95. The assessee or the Department could not clarify whether the depreciation remains to be unabsorbed. In view of the above, we do not find any merit in the appeals of the assessee. Accordingly, we confirm the order of the lower authorities on this issue. 10. The next issue arises for consideration for the assessment year 1996-97 is regarding levy of interest under section 234C of the Income-tax Act. Ms. B. Mala, the learned representative for the assessee submitted that the assessee paid the advance tax by depositing the cheque in the specified and authorised bank withi....
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....t. CIT v. Duramettalic Sanmar Ltd. in [IT Appeal No. 1437 [(Mad.) of 2000 dated 24-6-2005]. 12. We have considered the rival submissions on either side, and also perused the material available on record. As rightly submitted by the learned D.R., the Central Government Account (Receipts and Payments) Rules, 1983 clearly says that the date of payment of Government dues tendered in the form of cheque or draft shall be the date on which it was cleared and entered in the receipt scroll. This rule was framed by Government of India in exercise of the executive power conferred under article 283(1) of the Constitution of India. For the purpose of convenience, we are reproducing the article 283(1) of Constitution of India: "283. Custody, etc., of Consolidated Funds, Contingency Funds and moneys credited to the public accounts.-(1) The custody of the Consolidated Fund of India and the Contingency Fund of India, the payment of moneys into such Funds, the withdrawal of moneys therefrom, the custody of public moneys other than those credited to such Funds received by or on behalf of the Government of India, their payment into the public account of India and the withdrawal of moneys from su....
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.... case of Smt. Valli Alagappan v. Joint CIT in [I.T.A. No. 359 (Mad.) of 2001 dated 30-8-2005] held that the payment by cheque should be taken to be due payment if the cheque is subsequently encashed. This Tribunal placed its reliance on the judgment of the Madras High Court in the case of CIT v. Kumudam Publications (P.) Ltd. [1981] 128 ITR 617 and the judgment of the Apex Court in the case of K. Saraswathy v. P.S.S. Somasundaram Chettiar [1989] 4 SCC 527. Since the issue before the Tribunal was regarding prima facie adjustment under section 143(1)(a), this Tribunal held that it is a debatable issue. We further find that this Tribunal in the case of T. Stanes & Co. Ltd. v. Dy. CIT [IT Appeal No. 358 (Mad.) of 1996 dated 8-10-2003] held that when the payments were made by cheque, the date of presentation of the cheque should be taken as date of payment if the cheque was subsequently honoured. However, in the case of Duramettalic Sanmar Ltd. Tribunal by an order dated 24-6-2005 by referring to the CBDT circular dated 8-8-1979 and the Central Government Account (Receipts and Payments) Rules, 1983 held that the date of payment would be the date of actual realization of the amount by th....
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....an account-payee cheque or account-payee bank draft when the same exceeds Rs. 20,000 D or more. Similarly, section 269T of the Income-tax Act says that no banking company or a co-operative bank or co-operative society and no firm or other person shall repay any loan or deposit exceeding Rs. 20,000 in cash. Therefore, the Parliament in order to facilitate the usage of cheque and bank draft in the normal transaction introduced Chapter XVII in the Negotiable Instruments Act, 1881 and also introduced similar provisions in the Income-tax Act. Sections 271D and 271E of the Income-tax Act enable the income-tax authorities to impose penalty for failure to comply provisions of sections 269SS and 269T. Therefore, the intention of the Legislature is to make the citizens of this country to pay their liability through a crossed cheque or crossed bankers draft. Furthermore, the CBDT, the highest administrative body of the direct taxes, issued circular in Circular No. 261 dated 8-8-1979 clarifying that the date of payment would relate back to the date of presentation of the cheque if the cheque is honoured on presentation. Admittedly, this circular of the CBDT was not withdrawn even after Central....
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....k. And if the cheque is not dishonoured later, the payment shall be deemed to have been made on the date when the cheque was handed over to the Government's Bankers. Accordingly, the Government set aside the imposition of penalty/interest etc. in the said case. The ratio of above cited decision of the Government would apply mutatis-mutandis to the payment of service tax also. Therefore, it is clarified that in the cases where the service tax amount has been deposited by an assessee in the authorised Bank, by cheque, before the due date and such cheque is not dishonoured later, the Department need not initiate proceedings for reconvey of interest/penalty etc. However, if the cheque is not honoured in due course or the clearance is abnormally delayed for any lapse on the part of the assessee, the Department would be free to take penal action etc., as deemed fit." Therefore, it is very clear that even the Government has taken a decision with respect to the payment of Government dues by cheque. This circular of Directorate of Service Tax clearly expresses the intention of the Government in treating the payments made by the individual assessee by cheque or bank draft. 18. Now l....
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....ginally deposited the cheque on 15-3-1994. However, the same was returned unpaid. The cheque was again presented on 15-4-1994 which was honoured on 16-4-1994. The assessee claimed before the Authority for Advance Rulings that the payment should relate back to the date of original presentation. The Authority for Advance Rulings held that the contention of the assessee cannot be accepted. After referring to the Central Government Account (Receipts and Payments) Rules, 1983 and the CBDT circular, ultimately concluded that the payment can be said to have been made at the earliest on 15-4-1994 when the cheque was redeposited for second time. This decision of the Authority for Advance Rulings also supports the case of the assessee. The decision of the Authority for Advance Rulings clearly shows that the date of presentation of the cheque would be the date of payment provided the cheque was honoured on presentation. 21. In the case before us, admittedly, the cheques were presented and deposited before the authorized banker within the due date for payment of advance tax. The cheques were admittedly encashed and the amounts were realised subsequently. It is not the case of the Revenue th....