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TMI Blog1986 (11) TMI 121X X X X Extracts X X X X X X X X Extracts X X X X ..... under section 54E(1A) for claiming of this exemption. "(a) the assessee furnishes, along with the deposit, a declaration in writing, to the bank or the co-operative society referred to in the said sub-clause (vi) with which such deposit is made, to the effect that the assessee will not take any loan or advance on the security of such deposit during a period of three years from the date on which the deposit is made ; (b) the assessee furnishes along with the return of income for the assessment year relevant to the previous year in which the transfer of the original asset was effected or within such further time as may be allowed by the Income-tax Officer, a copy of the declaration referred to in clause (a) duly attested by an officer no ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ction 40A(3) of the Act was not absolutely mandatory and income-tax was a tax on real income. Since the expenditure in that case was not doubted, the High Court, deleted the disallowance made under this section. Another case cited was Billimora Engg. Mart v. CIT [1985] 156 ITR 153 (Guj.) in which the assessee was held entitled to registration even though it had failed to file the document constituted the partnership. Reference was also made to decision in UP Rajakiya Nirman Nigam Ltd. v. IAC [1984] 19 TTJ (All.) 576, in which failure to comply with the requirement of section 285A(1) of the Act was held to be only a technical default, which did not necessarily render the assessee liable to penalty. It was contended that since non-filing of d ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... riod of three years reckoned from the date of such deposit, furnish to the Income-tax Officer a certificate from the officer referred to in clause (b) of sub-section (1A) to the effect that the assessee has not taken any loan or advance on the security of such deposit during the said period of three years." 4. This means that not only the assessee has to comply with the conditions laid down by sub-section (1A), but also the condition laid down by this sub-section (1B). What the assessee has done is compliance of sub-section (1B), which he had to do after having complied with sub-section (1A). It was contended that non-compliance of sub-section (1A) has not benefited the assessee was caused any damage to the revenue. This is not correct. I ..... X X X X Extracts X X X X X X X X Extracts X X X X
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