9911796707
TMI Blog1988 (8) TMI 43X X X X Extracts X X X X X X X X Extracts X X X X ..... s and losses sustained by the said concerns are brought into the account of the parent firm, viz., the Universal Export and Import Agency. While scrutinising the account books of the Universal Export and Import Agency, it was noticed that accounts of certain parties (creditors) had been credited with interest, each such entry corresponding to a debit entry against the cash balance of the Universal Export and Import Agency. The firm maintained its books in accordance with the mercantile system. The aforementioned entries spanned the accounting years 1966-67 to 1972-73. Allegedly, after having paid interest which was not "interest on securities", the firm-in effect,accused-should have submitted the return prescribed by section 285 of the Act. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... in this court on July 22, 1981. Leave was accorded and the appeals admitted on July 28, 1981. Counsel for the accused formulates this contention, vide, limitation, thus : Section 378(5) of the Code of Criminal Procedure, 1973, which governs these appeals, prescribes a period of six months for moving an application to impugn an acquittal. The said period has to be computed from the date of acquittal. There are no exceptions or concessions to the mode of computation. Provisions of the Limitation Act, 1963, such as sections 5 and 12 are not applicable. In support of this argument, counsel relies on the Supreme Court's decision reported in Kaushalya Rani v. Gopal Singh, AIR 1964 SC 260. The decision relied upon construed section 417(4) of the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r section 378(5) of the 1973 Code. Thus reckoned, the contention that the appeals are time-barred has to be negatived. The second issue covers three related questions arising from the words used in sections 276(b) and 285 of the Act. For our purposes, these sections read as follows : "285. Information by persons responsible for paying interest.-The person responsible for paying any interest, not being 'Interest on securities', shall, on or before the fifteenth day of June in each year, furnish to the Income-tax Officer having jurisdiction to assess him, a return in the prescribed form and verified in the prescribed manner of the names and addresses of all persons to whom during the previous financial year he has paid interest or aggrega ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed securities or Government paper. For respondent No. 1, it was argued that the appellant had not excluded the possibility of the credit entries being interest on securities. This is an extreme stand to take, for having regard to section 18, such interest could not be paid by persons other than the issuers of the securities. A private party like the accused could not be paying interest on Government paper. When section 285 speaks of paying interest other than "Interest on securities", the aim is to make it abundantly clear that it relates to all types of interest other than "Interest on securities". To put it differently, the issuers of such securities, though liable to pay interest, are not within the ambit of section 285. The first poin ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed to the cash system of book-keeping under which a record is kept of actual cash receipts and actual cash payments,entries being made only when money is actually collected or disbursed. That system brings into credit what is due, immediately it becomes legally due and before it is actually received and it brings into debit expenditure the amount for which a legal liability has been incurred before it is actually disbursed. The profits or gains of the business which are thus credited are not realised but having been earned are treated as received though in fact there is nothing more than an accrual or arising of the profits at that stage. They are book profits. Receipt being not the sole test of chargeability and profits and gains that have ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... thus (at page 493) : " The decision in this case calls for a full and fair application of particular statutory language to particular facts as found. The desirability or the undesirability of one conclusion as compared with another cannot furnish a guide in reaching a decision." That section 285 excludes notional payments is made more than clear if one looks at another section in the Act, viz., section 194A. That deals with deduction of income-tax in relation to interest other than "Interest on securities". Clause (1) thereof says : "Any person not being an individual or a Hindu undivided family, who is responsible for paying to a resident any income by way of interest other than income chargeable under the head 'Interest on securiti ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
