2000 (6) TMI 23

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..... f the Income-tax Act, 1961 (hereinafter referred to as "the Act"), to this court : "Whether, on the facts and in the circumstances of the case, the assessee is entitled to claim deduction of the contribution made for purchase of National Savings Certificate even though the contribution has not come out of the income chargeable to tax in the previous year ?" The issue raised in this case is wit .....

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..... on March 31, 1986. Part of this was utilised for expenses and the National Savings Certificate was purchased from the income." This explanation was interpreted by the Department as amounting to say that the purchase has not come out of the income chargeable under the Act. The Tribunal considered the matter as follows : "Section 80C allows deduction for any sum paid in the previous year by the .....

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..... ubject to the limits prescribed therein." Learned counsel for the Revenue submitted that the view of the Tribunal that the payment can also be made out of the savings of the income in the preceding year to get exemption under section 80C of the Act is not correct. Learned counsel submitted that section 80C itself says that the payment should be made out of the income chargeable to tax, then o .....

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..... s not made out of the income chargeable to tax. That being the position, the Tribunal was not justified in holding' that even if the contribution did not come out of the income chargeable to tax, it was yet allowable as a deduction." Their Lordships followed the decision of the Orissa High Court in CIT v. Dr. Usharani Panda [1995] 212 ITR 119. Learned counsel for the respondent-assessee submit .....

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..... tificate and held that the assessee is bound to succeed from any point of view. This view taken by the Tribunal cannot be characterised as unreasonable or perverse. The assessee has clearly stated that the National Savings Certificate was purchased from the income and admittedly he had an income of Rs. 30,750 which is more than the amount invested in National Savings Certificate. We are in agreeme .....

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