1999 (2) TMI 436 - AT - Income Tax

Summary

Issues:
1. Non-allowance of rebate under section 88 for PPF payment.
2. Non-allowance of rebate for Life Insurance Premia.
3. Restriction of telephone expenses at 1/6th.

Issue 1: Non-allowance of rebate under section 88 for PPF payment
The appellant contested the denial of rebate under section 88 for a PPF payment of Rs. 60,000 made on 4-4-1991, arguing that it was paid out of income chargeable to tax. The Assessing Officer (AO) had denied the rebate stating that the PPF was not from the income of the current year. The ITAT referred to a High Court case and a CBDT circular which clarified that payments made out of income chargeable to tax could include accumulated balances from previous years. The ITAT directed the AO to verify if the PPF payment was made from income chargeable to tax in earlier years and allow the rebate accordingly.

Issue 2: Non-allowance of rebate for Life Insurance Premia
The appellant challenged the denial of rebate for Life Insurance Premia. The appellant's representatives argued that the receipt is issued only upon encashment of payment, which was after 31-3-1992. However, no evidence regarding the tender of the cheque was provided. The ITAT upheld the decision of the CIT(A) to deny the relief on this payment due to lack of evidence, thus rejecting this ground of appeal.

Issue 3: Restriction of telephone expenses at 1/6th
The appellant disputed the restriction of telephone expenses at 1/6th, claiming it was excessive. The ITAT examined the issue and found the 1/6th disallowance of telephone expenses to be reasonable. Consequently, the ITAT upheld the decision of the CIT(A) regarding the restriction of telephone expenses, thereby rejecting this ground of appeal.

In conclusion, the ITAT partially allowed the appeal for statistical purposes, addressing the issues of rebate under section 88 for PPF payment, rebate for Life Insurance Premia, and the restriction of telephone expenses at 1/6th. The judgment provided detailed analysis and interpretation of relevant legal provisions and precedents to arrive at its decisions.