COMMISSIONER OF INCOME TAX Vs. RAM MOHAN RAWAT

JUDGEMENT

(1.) ON an application under Section 256(1) of the Income-tax Act, 1961, the Tribunal has referred the following question for our opinion :

(2.) THE relevant assessment year is 1985-86. THE assessee has declared the income of Rs. 18,700. Revised return was fifed on March 31, 1987, declaring additional income of Rs. 15,000 from other sources. During the course of assessment, the Assessing Officer has noticed that the assessee has claimed deduction of Rs. 30,000 on account of purchase of National Savings Certificates. He claimed deduction under Section 80C of the Act. THE Income-tax Officer further noticed that investment in the NSCs is from the amount of FDRs which are matured in this year and not from "the income chargeable to tax". THE Assessing Officer has allowed the deduction to the extent of Rs. 19,626 on the ground that till March 23, 1985, the assessee has earned Rs. 19,626. Balance was disallowed in appeal before the Deputy Commissioner (Appeals), has also confirmed the view taken by the Assessing Officer. In appeal before the Tribunal, that the assessee had available income chargeable to the tax sufficient enough to cover the figure out of which the NSCs were purchased and it allowed the claim of the assessee following the decision of the Punjab and Haryana High Court in the case of Ravi Kumar Mehra v. CIT [1988] 172 ITR 108.

(3.) FOR the benefit under Section 88 the mere requirement is that if the assessee has invested income chargeable to tax for any assessment year then he will be eligible for deduction under Section 88 in the current year in which he made the investment.