TMI Blog1972 (6) TMI 19X X X X Extracts X X X X X X X X Extracts X X X X ..... NDA BHAT. JUDGMENT [After setting out of the statement of the case the learned judge continued.] This is a reference under section 256(1) of the Income-tax Act, 1961, hereinafter called "the Act", made at the instance of the Commissioner of Income-tax, Mysore. The question of law referred for the opinion of this court is : " Whether, on the facts and in the circumstances of the case, the donation of cloth of the value of Rs. 6,834 given by the assessee-company was eligible for exemption under section 88 of the Income-tax Act, 1961 ? " The assessment year is 1965-66, and the relevant accounting year is the calendar year 1964. The assessee is a public limited company carrying on the business of manufacture and sale of woollen and c ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t may be given to such donations also and that the value of the stock-in-trade donated should be included in the sale and the contra debit to the profit and loss account should be treated as the sum donated." Sri Balakrishna, learned counsel for the department, invited our attention to a subsequent circular of the Central Board of Direct Taxes dated 17th January, 1964, by which the circular dated 14th March, 1960, has been cancelled. The circular dated March 14, 1960, having been cancelled by the circular dated January 17, 1964, the learned counsel for the assessee is not entitled to rely on the earlier circular since the relevant year of accounting is the calendar year 1964. Sub-section (1) of section 88 of the Act as it stood at the rel ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ir stock-in-trade at the request of the charitable institutions as in the instant case. Sri Balakrishna was unable to state as to why Parliament should have restricted the rebate to cases where donations are made in cash only and not to donations made in kind out of the stock-in-trade of the assessee. If the assessee had given a cheque as donation and for the same amount prepared a bill of sale, it could have obtained the benefit of section 88(1). The decision in Associated Cement Company's case, rendered on 5th October, 1967, has held the field all these years. The department did not take up the matter in appeal to the Supreme Court. The said decision was rendered subsequent to the Board's circular dated January 17, 1964, referred to above ..... X X X X Extracts X X X X X X X X Extracts X X X X
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