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TMI Blog1990 (10) TMI 132X X X X Extracts X X X X X X X X Extracts X X X X ..... sessee is a Hindu Undivided Family and the relevant accounting period ended on 31-3-1985. The assessee purchased National Savings Certificates for Rs. 10,000 on 28-3-1985. According to the assessing officer they were purchased by procuring the amount on loan from Master Sanjiv. The assessee also paid Life Insurance Premium amounting to Rs. 17,915. According to the assessing officer this amount was procured by loans from Shri Raj Kumar & Sons and since the investments aforesaid were not made out of the assessee's income chargeable to tax relief under section 80C was denied. On appeal the learned CIT(A), Meerut directed the grant of deduction under section 80C by following a judgment of the Hon'ble Punjab & Haryana High Court in Ravi Kumar Me ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... only to that extent it can be said that no loan was raised. Thus, out of the total premium of Rs. 17,915 a sum of Rs. 3,830 was paid by raising a loan which stood paid off within the accounting period itself, i.e., on 6-11-1984 and the rest of the premium of Rs. 14,485 was paid by the assessee out of its own funds. As regards the purchase of National Savings Certificates of Rs. 10,000 the finding of the assessing officer that the amount was paid out of a loan taken from Sanjiv Kumar is not entirely correct. Sanjiv Kumar is the son of the assessee's karta. A copy of his account has been placed by the assessee at page 4 of the paper book, which shows that Sanjiv Kumar was a debtor to the extent of Rs. 5,000 and on 29-3-1985 he issued a chequ ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 915 is concerned, the assessee was entitled to relief under section 80C(2) on the whole amount. The reason is that the assessee admittedly had sufficient income for the year under consideration, out of which such amounts could have been paid. The loan of Rs. 3,830 that was raised for the first payment of Rs. 4,825 stood paid off within the accounting period itself on 6-11-1984 when the assessee advanced Rs. 63,383.83P to Raj Kumar. In a case like this, where the assessee temporarily raises a loan for the payment of Life Insurance Premium or the purchase of National Savings Certificates and repays the loan within the accounting period itself, I am of the opinion the investment should be deemed to have been made out of income chargeable to ta ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... CIT(A) was, therefore, not right in accepting the assessee's claim. The Revenue's appeal, therefore, is allowed and setting aside the order under appeal, I restore the order as passed by the assessing officer. 6. Now I come to ITA No. 159 in the matter of M/s Kasturi Lal & Sons, a Hindu Undivided Family. In this case the assessee purchased National Savings Certificates worth Rs. 15,000. According to the assessee the amount for the purchase of the NSCs was paid from a loan of Rs. 15,900 from M/s Vidya Sagar Pan Kumar on 28-3-1985. The assessee also paid Life Insurance Premium amounting to Rs. 7,565. According to the assessing officer this was paid by taking a loan from Kasturi Lal Dewan. The assessing officer, therefore, denied the benefit ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nt of M/s Vidya Sagar Parag Kumar in the books of the assessee or the copy of the assessee's account in the account books of M/s Vidya Sagar Parag Kumar. None of the two accounts has been filed before me and the finding of the assessing officer that the payment was out of a loan raised from Vidya Sagar Parag Kumar does not appear to have been challenged before the first appellate authority. In view of the law as discussed in the earlier part of this order, relief under section 80C(2) cannot be allowed if the payments have been made out of loan taken and not repaid during the accounting year itself out of income chargeable to tax. The assessing officer was, therefore, right in denying the benefit of deduction under section 80C(2) to the asse ..... X X X X Extracts X X X X X X X X Extracts X X X X
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