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TMI Blog2005 (2) TMI 80X X X X Extracts X X X X X X X X Extracts X X X X ..... ings Certificates to the extent of Rs. 5,000 purchased by raising a loan? - 2. Whether Tribunal was right in holding that the assessee was entitled to relief under section 80C of the Act in respect of life insurance premium paid in the sum of Rs. 17,915 and National Savings Certificates purchased to the extent of Rs. 5,000?" - we respectfully agree we answer question No.1 referred to us in the ne ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... cts and in the circumstances of the case, the Tribunal was right in holding that the assessee was entitled to relief under section 80C of the Act in respect of life insurance premium paid in the sum of Rs. 17,915 and National Savings Certificates purchased to the extent of Rs. 5,000?" The reference relates to the assessment year 1985-86. Briefly stated the facts giving rise to the present refe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y raises loan for payment of life insurance premium or purchase of National Savings Certificates and repays the loan within the accounting period itself, investment should be made out of the income chargeable to tax. In the present case, it was found that the National Savings Certificates of Rs. 5,000 were purchased out of the loan not repaid during the accounting period. Therefore, out of the pur ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e from the same amount which an assessee had earned by way of income. It is always open to an assessee to either spend the amount earned by him as an income which is more than the amount invested under section 80C. The investment in NSC can be said to be out of income of the previous year. This court has agreed with the view taken by the Orissa High Court in the case of CIT v. N. Benugopal Choudhu ..... X X X X Extracts X X X X X X X X Extracts X X X X
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