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Issues involved:
Denial of assessee's claim of deduction under s. 80C of the IT Act. Analysis: 1. The only issue involved in this appeal was the denial of the assessee's claim of deduction under s. 80C of the IT Act amounting to Rs. 24,392 out of a total claim of Rs. 29,300. The assessee's counsel argued that the contribution should be out of taxable income, regardless of whether it is from the same year or past savings. The counsel presented evidence that the contribution made by the assessee was from past savings accumulated from taxable income of past years. 2. The assessee's counsel cited previous decisions by the Tribunal in similar cases where the claim under s. 80C was allowed, supporting the argument that contributions from past savings should qualify for deduction under s. 80C. 3. After considering the submissions, facts, and previous decisions, the Tribunal found merit in the assessee's argument. The Tribunal clarified that the deduction under s. 80C requires the contribution to be from either the current year's income or past savings accumulated from taxable income in past years. The Tribunal rejected the Revenue's interpretation that the contribution must be from the taxable income of the current year itself. 4. The Tribunal emphasized that for s. 80C deduction, the focus should be on the total income of the year, not just the income till the date of contribution. It was clarified that the law does not mandate the contribution to be made from the same source as the current year's income. The Tribunal highlighted that income tax is levied on a yearly basis, not daily. 5. In the specific case, the Tribunal noted that there were sufficient credits in the assessee's accounts from the current year's income to cover the contribution made, further supporting the allowance of the deduction under s. 80C. 6. Consequently, the Tribunal set aside the orders of the lower authorities and directed the Assessing Officer to allow the assessee's claim of deduction under s. 80C, ruling in favor of the assessee. 7. As a result of the detailed analysis and findings, the assessee's appeal was allowed by the Tribunal.
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