1990 (9) TMI 4

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..... Fibres and Chemicals Ltd. having a face value of Rs. 12,50,000 to each of two trusts, namely, H. H. Maharani Setu Parvati Bayi Trust and H. H. Princess Lakshmi Bayi Trust. The total donation, according to the assessee, amounted to Rs. 25,00,000. For the assessment year 1968-69, the assessee claimed exemption under section 80G of the Act in respect of the aforesaid donations made by him to charitable trusts. The Income-tax Officer rejected the claim. On appeal, the Appellate Assistant Commissioner directed the Income-tax Officer to call for the relevant receipt and, if satisfied with the admissibility of the deduction claimed, to grant the deduction according to law. The Revenue preferred an appeal before the Appellate Tribunal. The Tribuna .....

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..... ssessee" has been used makes the legislative intent clear that it refers to the amount of money paid by the assessee as donation. The Act provides for assessment of tax on the income derived by an assessee during, the assessment year ; the income relates to the amount of money earned or received by an assessee. Therefore, for purposes of claiming deduction from income-tax under section 80G(2)(a), the donation must be a sum of money paid by the assessee. The plain meaning of the words used in the section does not contemplate donations in kind. Donations may be made by supplying goods of various kinds including building, vehicle or any other tangible property but such donations, though convertible in terms of money, do not fall within the sco .....

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..... two opinions in the aforesaid judgments, we are in agreement with the view taken by the High Courts of Andhra Pradesh, Allahabad and Gujarat in holding that section 80G(2)(a) contemplates only cash amount of money as donation, for claiming relief of deduction and it does not refer to any donation made in kind. It appears that, in view of the conflicting opinions expressed by the various High Courts, Parliament intervened and added Explanation 5 to section 80G by the Finance Act, 1976. Explanation 5 reads as under : "For the removal of doubts, it is hereby declared that no deduction shall be allowed under this section in respect of any donation unless such donation is of a sum of money." After the insertion of the aforesaid Explanation, .....

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