Aye, when you have map contacts on, you see their sonar, and their asdic coverage.
Again though, I have map contacts off. I plot everything by hand on a RL piece of paper. I saw the dotted circle when I got a radio contact report for a warship sailing close by.
Later, it turned out to be an torpedo boat.
EDIT;
Image shows my problem. Happened again after a crash and a savegame