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TMI Blog1988 (1) TMI 74X X X X Extracts X X X X X X X X Extracts X X X X ..... assessee received a sum of Rs. 31,320 from the Life Insurance Corporation as maturity value of a Life Insurance Policy. He stated that he invested a sum of Rs. 27,000 out of the above amount in purchasing National Savings Certificates in September, 1984 relevant for the asst. yr. 1985-86 which is under consideration. The assessee's claim for relief under s. 80C of the IT Act, 1961 was rejected by the ITO on the ground that the investment in National Savings Certificates was not paid out of the assessee's income chargeable to tax in the previous year under consideration. He found that only a sum of Rs. 2,000 was utilised from salary income for the purchase of NSC. Hence, he allowed claim for relief under s. 80C of the Act on only Rs. 2,000 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ested out of the maturity amount received from the LIC. 5. Shri S. Dasgupta, the learned representative for the Department, urged before us that the AAC erred in his decision. He referred to s. 80C(2)(e)(i) of the Act. This section clearly states that the sums which will qualify for relief should come out of the income chargeable to tax. Then, he referred to s. 80A which refers to 'total income' which is defined under s.2(45). This definition refers to the charging s. 5 of the Act which refers to a particular previous year whose income has to be computed at a time in respect of each assessment year. His point was that the maturity amount received from LIC did not represent the income chargeable to tax during the previous year under consi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e discarded on any pretext vide the decision of the Supreme Court in the case of CIT vs. Sundaram Iyenger (1976) CTR (SC) 25: (1975) 101 ITR 764 (SC). Again, it has been held by the Supreme Court in the case of Madurai District Central Cooperative Bank Ltd. vs. ITO (1975) CTR (SC) 220 : (1975) 101 ITR 24 (SC) that mere harshness of a taxing statute cannot invalidate it. The rule that an interpretation favourable to the assessee should be adopted is applicable only when two reasonable interpretations are possible and not when only one interpretation is reasonably possible vide decision in CED vs. Alladi Kupouswamy (1977) CTR (SC) 297 : (1977) 108 ITR 439 (SC). In this case it has been held that it the language clearly takes in a case it shou ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... AC is not to the point as it ignores the express provisions of the statute. The above understanding of ours does not involve any manifest absurdity. Hence, relying on the guidelines laid down by the aforesaid authorities, we come to the conclusion that the assessee has not been able to establish that his claim comes within the four corners of the language used in s. 80C(2)and so we do not agree with the decision of the AAC on this point. We also find support for this conclusion of ours from the decision of the Bombay High Court in the case of S. Inder Singh Gill vs. CIT (1963) 47 ITR 284 (Bom). We, therefore, reverse the order of the AAC on this point and restore that of the ITO. 9. In the result, the appeal is allowed. - - TaxTMI - ..... X X X X Extracts X X X X X X X X Extracts X X X X
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