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TMI Blog1991 (5) TMI 81X X X X Extracts X X X X X X X X Extracts X X X X ..... tificates of the balance amount of Rs. 15,000 had been purchased out of the amount received on maturity of CTD 10 years in respect of which Rs. 33,000 had been credited in the pass-book of the assessee. The certificate of Rs. 20,000 have been purchased on 13-2-1986 and those of Rs. 15,000 have been purchased on 18-4-1985. According to the ITO the assessee had invested amount of Rs. 35,000 out of the Provident Fund amount and CTD amount received by him. According to him deduction under section 80C could be claimed only if the investments in question had been made out of the income chargeable to tax and that the Provident Fund amount and CTD amount received by the assessee did not represent amount chargeable to tax either in the current year ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... had been made at the very beginning of the assessment year and as such, the said investment could not be attributed to the income of the relevant accounting year and as such, deduction under section 80C would not be allowable in respect of that investment. As regards the balance of Rs. 20,000 he held that prior to the deposit of PF amount the assessee had enough balance in his bank account and investment could be attributed to the amount which was in deposit in the bank account prior to the deposit of the PF amount and as such, deduction under section 80CCA was allowable in respect of the said investment of Rs. 20,000. He, accordingly, confirmed the disallowance of deduction under section 80C in respect of investment of Rs. 15,000. The ass ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e language is identical. In section 80C, the words mentioned are "any sums paid in the previous year by the assessee out of his income chargeable to tax". The intention underlying this provision is to encourage the assessees in making investment in specified securities. The very purpose would be frustrated if it is held that such investment could be made only after the assessee earned income chargeable to tax in that year. If such interpretation is made, it would mean that an assessee could make investment only after earning income of the relevant year and not at any time during the relevant year. Such interpretation would frustrate the very purpose underlying section 80CCA. An assessee maintains joint fund in which savings of the past year ..... X X X X Extracts X X X X X X X X Extracts X X X X
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