9911796707
TMI Blog1998 (12) TMI 100X X X X Extracts X X X X X X X X Extracts X X X X ..... e should be of the same year in which the contribution has been made. He has further submitted that the past savings of the assessee, if proved to be out of taxable income of past years, have to be taken as taxable income for the purpose of s. 80C, and that contribution out of such past savings qualifies for deduction under s. 80C. Reverting to the facts of the case, the assessee's counsel submitted that the assessee was an employee of M/s Jai Prakash Associates (P) Ltd. where it was maintaining two accounts in his name—one account named as "Personal a/c" and the other account named as "Deposit Account". Referring to the assessee's personal account for the year ending 31st March, 1986—placed at p. 8 of the assessee's compilation, the assess ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e's claim under s. 80C has been allowed. 3. We have considered the rival submissions, facts and circumstances of the case as well as the Tribunal's decision relied upon by the assessee and after careful consideration of the same are of the opinion that there is force in the submissions advanced by the assessee's counsel. In our opinion, the requirement of law for the deduction under s. 80C is that for qualifying the contribution as deduction under s. 80C, the contribution should be either out of current year's income chargeable to tax or out of past savings which have been accumulated out of income chargeable to tax in those past years and one to one corelation of the contribution with receipts on account of current year's income on the i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... re being credit to the tune of Rs. 24,000 in the personal account and to the tune of Rs. 2,508 in the deposit account wherefrom a sum of Rs. 35,000 has been transferred to personal account, the total credit on account of current year's income by the time the contribution was made was at Rs. 26,508, as against the contribution of Rs. 24,392.50 which was quite sufficient to cover the contribution.
6. In view of the above discussion, we are of the opinion that assessee was entitled to the deduction under s. 80C. Consequently, we set aside the order of the CIT(A) as well as of the AO on this point and direct the AO to allow the assessee's claim of deduction under s. 80C.
7. In the result, assessee's appeal is allowed. X X X X Extracts X X X X X X X X Extracts X X X X
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