TMI Blog1989 (11) TMI 77X X X X Extracts X X X X X X X X Extracts X X X X ..... accumulated earned leave to his credit, he went on to get salary from 1-11-1984 to 30-4-1985. There is no controversy about the fact that within five days of his retirement, he got the provident fund. The assessing officer and the Dy. C.I.T.(A) denied him the benefit under section 10(10-AA). Their contention was that it was not on the retirement or superannuation when the assessee got the benefit of leave encashment. Hence, according to them, it could not be exempt under section 10(10-AA). 3. The learned authorised representative for the assessee submitted that the assessee had actually retired on 31-10-1984 and he got the provident fund within 5 days then. He drew my attention to the certificate placed on page 10 of the paper book. He ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 1984 to 30 April 1985) was paid to Shri Banerjee in monthly instalments, at his option, after attaining the age of retirement and he was not on duty after 31 October 1984. This certificate is issued to Shri Banerjee for submission to the Income-tax Office. Undoubtedly he went on to get the salary for six months, i.e. from 1-11-1984 to 30-4-1985, but not for a day he worked in the office during this period nor he could be treated as the employee of the bank during this period. To that effect another, certificate is also placed as Annexure in the compilation, which was in conformity with the rules of NABARD. The said certificate reads as under :-- " 15 March 1986. This is to certify that in terms of Rule 19(1) of NABARD (Staff) Rules 198 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ancial year 1984-85, which is relevant for the assessment year 1985-86 under consideration, was Rs. 77,000. The salary from April to October 1984 aggregated to Rs. 38,762. The assessee purchased National Savings Certificates of the value of Rs. 28,000 on 14-11-84. The assessing officer observed that the assessee acquired the National Savings Certificates out of the provident fund received from his employer, which was deposited in the Canara Bank in which the assessee had the cheque facility. He never made any inquiry about the details of balances held by the assessee in other banks and also other resources. The Dy. C.I.T(A) also confirmed the findings of the assessing officer denying the assessee the benefit of section 80C. The learned auth ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... or and ought not to have weighed with the revenue, for disallowing the deduction under section 80C(1). By making payment of the life insurance premia by withdrawing the amount from its personal account with the said company the credit balance of the assessee in the said account was correspondingly reduced. This in clear terms meant that the income of the assessee after giving deduction of life insurance premia under section 80C(1) would also be correspondingly reduced. An assessee may make payment of the life insurance premia out of his savings account with a bank where the balance to his credit is available before the commencement of the accounting year. This will in no case mean that the payment of premia so made is not to be deducted out ..... X X X X Extracts X X X X X X X X Extracts X X X X
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