TMI Blog2023 (2) TMI 192X X X X Extracts X X X X X X X X Extracts X X X X ..... nefit of deduction u/s.80G of the Act, for simple reason that donations paid in cash and donations paid in kind are entirely different. Donations paid in kind is something which is paid in the form of some goods and articles, whereas, donations paid in cash means any payment by cash or by cheque or by any electronic mode of transfer of funds. In this case, there is no dispute with regard to the fact that the assessee had given loans to Trust in earlier financial years through proper banking channel and further, said loans have been converted into donations during the impugned assessment years. Therefore,donations paid by the assessee by conversion of loans into donations comes under the nature of donations paid in cash and thus, th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hese appeals are being heard together and disposed off, by this consolidated order. 2. The brief facts of the case are that the assessee company is in the business of manufacturing of steel castings in machined and un-machined condition, filed its return of income on 20.09.2014 for the AY 2014-15, declaring a total income of Rs.15,76,72,010/-, on 23.09.2015 for the AY 2015-16 declaring a total income of Rs.12,77,52,370/- and on 14.10.2017 for the AY 2017-18 declaring a total income of Rs.10,92,53,130/-. A survey u/s.133A of the Act, was conducted in the case of the assessee on 15.12.2017 and consequently, the assessment has been re-opened u/s.147 of the Act. During the financial year relevant to the AYs 2014-15, 2015-16 2017-18, the as ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... kind. The AO further observed that conversion of loan into donation amounts to donation given in kind and thus, the assessee is not entitled to claim deduction u/s.80G of the Act. Therefore, disallowed deduction claimed u/s.80G of the Act, on amount which is converted out of loans. 3. Being aggrieved by the assessment order, the assessee preferred an appeal before the Ld.CIT(A). Before the Ld.CIT(A), the assessee has reiterated its arguments taken before the AO and submitted that the AO never disputed the fact that all donations are paid through proper banking channel. However, rejected deduction on amount pertains to conversion of loans into donation only on the ground that the said donation is in the nature of donation paid in kind. Th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of the Act. 5. The Ld.DR, by referring to the provisions of Sec.80G of the Act, submitted that it is only donations paid in cash during the relevant previous year is eligible for deduction u/s.80G of the Act. Further, donations paid in kind is not eligible for deduction u/s.80G of the Act, and in this regard, he relied upon the decision of the Hon ble Gujrat High Court in the case of Miss. Yeraben R. Amin (supra). 6. We have heard both the parties, perused the materials available on record and gone through orders of the authorities below. There is no dispute with regard to the fact that the deduction claimed by the assessee u/s.80G of the Act, towards donation paid to M/s.Sri Ranganathar Trust, is registered u/s.12AA of the Act u/s. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ny payment by cash or by cheque or by any electronic mode of transfer of funds. In this case, there is no dispute with regard to the fact that the assessee had given loans to Trust in earlier financial years through proper banking channel and further, said loans have been converted into donations during the impugned assessment years. Therefore, in our considered view donations paid by the assessee by conversion of loans into donations comes under the nature of donations paid in cash and thus, the assessee is entitled for deduction u/s.80G of the Act. This view is fortified by the decision of the ITAT Allahabad Bench in the case of M/s.General Capital and Holding Co. Pvt. Ltd., where the Tribunal after considering relevant facts held that co ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... wance of Rs.11,11,111/- under challenge .. . 8. In so far as the decision relied upon by the AO and the Ld.CIT(A) in the case of the Hon ble Apex Court in the case of H.H. Sri Rama Verma v. CIT reported in [1991] 187 ITR 308 and the Hon ble Gujarat High Court in the case of Miss. Yeraben R. Amin (supra), no doubt about ratio laid down by the Hon ble Courts on the issue of deduction u/s.80G of the Act, and held that deduction should be allowed to donations which are in the form of cash and not otherwise and further, the donations should be made during the relevant financial year. In our considered view, said decision goes in favour of the assessee, if you apply the ratio laid down by the Hon ble Courts in real sense, because, in the pre ..... X X X X Extracts X X X X X X X X Extracts X X X X
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