TMI Blog2014 (11) TMI 396X X X X Extracts X X X X X X X X Extracts X X X X ..... technical formalities of the State Government for purchasing the equipments, had made available these equipments directly - It has been certified by the Medical superintendent of M/s Rajasthan Medical Relief Society, S.M.S. Hospital, Jaipur, that the appellant had made payment on behalf of the society – following the decision in Saurashtra Cement and Chemical Industries Ltd. Vs. CIT [1979 (2) TMI 21 - GUJARAT High Court] - the order of the CIT-I, Jaipur passed U/s 263 of the Act is upheld – Decided in favour of assessee. - I.T.A. No. 298/JP/2014 - - - Dated:- 5-11-2014 - Shri R. P. Tolani And Shri T. R. Meena,JJ. For the Petitioner : Shri P. C. Parwal For the Respondent : Shri Subhash Chandra. ORDER Per: T. R. Meena, A.M. This is an appeal filed by the assessee against the order dated 21/02/2014 of the learned C.I.T.-I, Jaipur for the A.Y. 2009-10. The sole ground of appeal is against that the Assessing Officer has wrongly allowed the deduction of ₹ 86,41,387/- U/s 80G of the IT Act. 2. In this case, the assessee company is engaged in the business of trading and export of readymade garments. The assessee filed returned income for A.Y. 2009-10 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ny s policy on corporate social responsibility (CSR). He, therefore, requested to drop the proceedings initiated U/s 263 of the Act. 3. After considering the assessee s reply, it has been held by the CIT-I that it is evident from the records that the assessment order was passed by the Assessing Officer without considering the facts of the issue and relevant provisions of Section 80G of the Act. Whatever evidence filed by the assessee for claiming deduction has not been verified by the Assessing Officer. Neither any query was raised by her nor any explanation sought from the assessee during the assessment proceedings on this issue. This is non-application of mind and non-application of correct provisions of law. Therefore, the Assessing Officer s order is erroneous and prejudicial to the interest of the revenue. The learned CIT referred Explanation-5 of Section 80G on page 3 of his order and also quoted the Hon ble Apex Court decision in the case of H.H. Shri Rama Verma Vs. CIT 187 ITR 308 and Hon ble Gujarat High Court decision in the case of CIT Vs. Miss Yeraben R. Amin 115 CTR 120. He further relied upon the decision of Hon ble ITAT Jaipur Bench decision in the case of ITO Vs. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rt must look to the substance of the donation and not merely to the form in which it is made. If on the facts, having regard to the substance of the transaction, the Court is satisfied that it is essentially a donation in cash, the rebate under s. 80G would be admissible to the assessee. If it is a donation in kind, pure and simple, it would clearly fall outside the purview of s. 80G of the Act. None of the decisions cited above took the view that a transaction of donation in kind would qualify for rebate under s. 80G if the Act. If such was the view of the Bombay High Court in Associated Cement Company's case (1968) 68 ITR 478, there was no need for the Court to examine the substance of the transaction for the purpose of deciding whether it was a transaction in cash. It was only after the Court came to the conclusion that in substance it was a transaction in cash that it had upheld the assessee's claim for rebate under s. 15B of the Indian IT Act, 1922. The Mysore High Court as well as the Andhra Pradesh High Court have followed the view expressed by the Bombay High Courts in the aforesaid case. They too have taken the view that if it is found that in substance the transac ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to the assessee. In case of the decision of Supreme Court in 187 ITR 308 and Gujarat High Court in 115 CTR 120 relied by CIT, the donation was of shares and therefore it was held that deduction u/s 80G is not available. However, the Supreme Court in its decision approved the decision of Gujarat High Court in CIT Vs. Smt. Dhiraj Ben R. Amin 141 ITR 875 (supra). Thus, the law is that if in substance the transaction is a money transaction deduction u/s 80G is allowable. To examine whether a donation in substance is a money transaction or not, reference can be made to the decision of Bombay High Court in CIT Vs. Associated Cement Co. Ltd. 68 ITR 478. In this case University of Bombay wrote to the Chairman of the assessee co. a letter saying that it is carrying out important laboratory experiments for which it require rottery experimental kiln . Since the company was fabricating the kiln, its Board of Director passed a resolution sanctioning ₹ 6,600/- being the cost of the Pilot Kiln manufactured for the assessee and supplied the kiln. In these facts it was held that having regard to the nature of transaction, in substance it was a transaction where a sum of ₹ 6,60 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... g the various decisions stated supra assessee is entitled to deduction u/s 80G. Otherwise also in course of assessment proceedings, assessee vide letter dt. 25.11.2011 has explained these facts and considering the same AO allowed deduction u/s 80G. Therefore, CIT has erred in observing that there is non application of mind, non verification of facts and non application of correct provision of law by the AO. To what extent, the AO should make investigation is a matter left to the wisdom of the AO u/s 143(3). Therefore, the order passed by CIT u/s 263 is not valid in law. Further, where another view is possible, revision is not permissible. For this, reliance is placed on following cases:- (i) CIT Vs. New Delhi Television Ltd. (2013) 360 ITR 44/ 94 DTR 21 (Del.)(HC) (ii) Malabar Industrial Co. Ltd. Vs. CIT 243 ITR 83 (SC) In view of above, the order passed by CIT u/s 263 directing the AO to withdraw the deduction allowed by him u/s 80G is illegal and bad in law, his order be set aside and the order of AO allowing deduction u/s 80G be upheld. 6. At the outset, the learned C.I.T. D.R. vehemently supported the order of the learned CIT-I on the basis of Explanation-5 of Se ..... X X X X Extracts X X X X X X X X Extracts X X X X
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