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Section 80C of Income-tax Act, 1961 - Deductions - Life insurance premia, contribution to provident fund etc. Investment in National Savings Certificates, etc. for claiming deduction under section 80C need not be from income earned up to that period; it would be sufficient if total income of assessee for that year covers investment [Assessment year 1992-93] [In favour of assessee] CIT v. Pursottam SA [2009] 318 ITR 286 (All.) As held in CIT v. Ramesh Chandra Khandelwal [2005] 273 ITR 363 (All.) and Raj Kumar Dewan & Sons v. CIT [2005] 277 ITR 561 (All.), investment in National Savings Certificates, etc. for claiming deduction under section 80C need not be from the income earned up to that period; it would be sufficient if the total income of the assessee for that year covers the investment. A.N. Mahajan for the Applicant . Shakil Ahmad for the Respondent. JUDGMENT 1. The Income-tax Appellate Tribunal, Allahabad, has referred the following questions of law under section 256(1) of the Income-tax Act, 1961 (hereinafter referred to as the Act) for opinion of this court. "Whether on the facts and in the circumstances of the case the hon'ble Income-tax Appellate Tribunal is justified in law in holding that the assessee is entitled to deduction under sections 80CCA and 80CCB of the Income-tax Act ?" 2. The reference relate to the assessment year 1992-93. Briefly stated, the facts giving rise to the present reference are as follows : 3. The assessee had made an investment of Rs. 40,000 in National Savings Scheme and another investment of Rs. 10,000 in Unit Trust of India Magnum. His claim for deduction under sections 80CCA and 80CCB on the above investments was rejected by the Assessing Officer, vide his order dated February 24, 1993, on the ground that the investment had not come out of income chargeable to tax. The case of the assessee before the learned Commissioner of Income-tax (Appeals) was that during the year he had given a loan of Rs. 2 lakhs to one M/s. Ganesh Prasad Hira Lal and that the withdrawals of Rs. 50,000 invested in the schemes, were made from the said account. The learned Commissioner of Income-tax (Appeals) held that the assessee had failed to…

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