TMI Blog1996 (1) TMI 141X X X X Extracts X X X X X X X X Extracts X X X X ..... f the Act. The Assessing Officer (AO) noted that the above mentioned contributions had been made out of past savings, maturity of CTD Account and maturity of NSCs. He disallowed the claims of the assessee observing as under: "The above amounts are not invested out of the income earned during the year and chargeable to tax. Sub-s. (2) of s. 80C says that the deduction under this section allowable only if the investments are made out of the income of the assessee chargeable to tax. The sum of Rs. 32,000 are invested out of the amount matured on 5th Aug., 1988, 13th Sept., 1988 and 4th Oct., 1988 from the CTD and FRD accounts. Thus it is not the amount of income chargeable to tax and, hence, not qualified for the deduction under s. 80C. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... and relied upon the recent judgment of the Orissa High Court in the case of CIT vs. Dr. Usharani Panda (1995) 129 CTR (Ori) 388 : (1995) 212 ITR 119 (Ori) where the Hon'ble High Court has held that deduction under s. 80C of the Act can be claimed by an individual only if he has paid any sum in the previous year out of his income chargeable to tax. if the same has been paid out of an income which was not chargeable in the previous year, then the deduction claimed cannot be allowed. 6. We have considered the rival submissions and perused the facts on record. The provisions of ss. 80C and 80CCA refer to "sums paid in the previous year" but there is no requirement under the said sections that it should be out of "income chargeable to tax of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... een effected out of assessee's current income chargeable to tax. Thus the case of the assessee before us also stands fortified by the aforesaid circular of the CBDT. 8. Similar issue came up before the Tribunal, Jaipur Bench in the case of Balwant Singh vs. ITO and the issue was decided in favour of the assessee. The Hon'ble Members of the Bench have usefully referred to the aforesaid Supreme Court decision in Chandulal Harjivandas and also the CBDT Circular No. P-3. The Tribunal, Jaipur Bench has, therefore, preferred to follow the decision of the Punjab Haryana High Court in the case of Ravi Kumar Mehra and rightly so. 9. It is no doubt true that the Hon'ble Orissa High Court has taken a different view in the case of Dr. Usharani ..... X X X X Extracts X X X X X X X X Extracts X X X X
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