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TMI Blog1992 (4) TMI 74X X X X Extracts X X X X X X X X Extracts X X X X ..... respect of the sums of Rs. 10,000 each paid by them on 5-8-1987 as contribution to the security of Central Govt. i.e., National Savings Certificates (NSCs). The ITO noted that Smt. Gaitri Devi had withdrawn on 5-8-1987 a sum of Rs. 5,000 only from her capital account in the firm and the balance of Rs. 5,000 had been withdrawn from her savings bank account wherein surplus money of earlier years which had already been charged to tax had been kept. In the case of Sri Govardhan Agarwala he noted that he had withdrawn Rs. 2,000 only from his capital account in the firm in the year under consideration and that might have been utilized by him in his household expenses. On query it was stated by the Counsel for the assessee that the amount of Rs. 1 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tween 'income charged to tax' and 'income chargeable to tax'. It was stressed that looking to the history of the legislation purpose of and object behind insertion of section 80C, the intention of Legislature was to give incentive to the assessees for effecting long term savings by them out of their current and not past incomes (which might have been subjected to tax in earlier years and part taken the character of savings). The learned Departmental representative thus pressed for restoration of the order of the ITO. 5. The assessees' Counsel supported the order under appeal almost on the same ground which found favour with DC (Appeals) and as are mentioned in the written submission filed before the DC (Appeals). The assessees' Counsel co ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ious year. The purpose of and object behind the various amendments made in section 80C from time to time was elaborately explained by the CBDT in their circular Nos. 72 dated 6-1-1972, 126 dated 20-11-1973, 169 dated 23-6-1975, 240 dated 17-5-1978, 258 dated 14-6-1979, 281 dated 22-9-1980 and 346 dated 30-6-1982. A study of the amended provisions made along with the above-mentioned circulars of the CBDT brings it out clearly that the Legislative intention in providing incentives for effecting long term savings has been to inculcate and cultivate a habit of "save while you earn" amongst the taxpayers so that their savings might be utilised for providing health to the national economy which may put the country on the path of progress and pros ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s "income charged to tax" would mean that the event of chargeability has already taken place. If the Legislature would have intended that tax rebate be allowed on investment of past savings it could have used the words "charged to tax" in the language of section 80C(2)(h) as stated above the object behind allowing tax rebate on investments made in long term savings was to encourage savings out of current incomes and not on preserving savings. I am thus of the opinion that investments in the long term savings for benefit under section 80C(2)(h) were required to be made out of assessees' income of the year under consideration, which they did not do. They were, therefore, not entitled to the deduction claimed. " 9. On merits even I find that ..... X X X X Extracts X X X X X X X X Extracts X X X X
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