TMI Blog1992 (4) TMI 81X X X X Extracts X X X X X X X X Extracts X X X X ..... aining amount of Rs. 5,000 to Digvijay Federation, Ahmedabad was made in cash which stood hit by section 40A(3) of the Act, though otherwise the same was eligible for deduction under section 80G. He, therefore, restricted the deduction to Rs. 250 being 50 per cent of the eligible amount of Rs. 501. 8. In appeal the main argument advanced on behalf of the assessee was that a payment partakes the character of expenditure only when it is laid out or expended for the purpose of earning profit in business. On this line of reasoning it was submitted that a donation not being an expenditure was not hit by the provisions of section 40A(3). However, relying upon the Orissa High Court decision in the case of Sajownlal Jaiswal reported in 103 ITR 70 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... is admissible under section 80G or section 80GGA or section 80HH, or section 80HHA or section 80HHB or section 80HHC or section 80HHD or section 80HHI or section 80HHJ or section 80JJ no deduction under the same section shall be made in computing the total income of a partner of the firm or as the case may be member of association of persons or body of individuals in relation to the share of such partner in the income of the firm or the share of such member in the income of association of persons or body of individuals. The term "Gross Total Income" is defined in sub-section (5) of section 80B of the Act as meaning the total income computed in accordance with the provisions of the Act before making any deduction under Chapter VI-A. Sections ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the Tribunal held that the payment fell within the purview of section 40A(3). The Hon'ble High Court observed that payment for purchase of goods would certainly be an expenditure and the expenditure referred to in section 40A(3) is not confined to expenditure. That could be claimed as deduction under section 37 and refers to any payment made by the assessee and taking into account in computing the total income under the provisions of the Act. We have discussed above that in computing the total income of the assessee the expenditure is to be considered with reference to sections 28 to 44D of the Act. In our opinion, this case does not help the revenue. 12. The view that the provisions of section 40A(3) are not applicable to the deductions ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... lf suggests that the term "expenditure" occurring in the language of section 40A(3) does not embrace within its fold the term donation as mentioned in section 80G. Thus we are clearly of the opinion that the provisions of section 40A(3) are not applicable to a donation made under section 80G of the Act. 14. On merits also we are clearly of the opinion that the payment in question was not to be disallowed. The genuineness of the payment is not at all disputed or doubted. Once the genuineness of the transaction has not been disputed or doubted, there can hardly be other grounds, particularly in the matter of disallowing donations made to charitable institutions to disallow the expenditure. The Board circular thus does not come in the way of ..... X X X X Extracts X X X X X X X X Extracts X X X X
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