Law:

Section:

Section 88 of the Income-tax Act, 1961 - Tax rebate - General - Assessment year 1965-66 - Whether in order to attract provisions of section 88 there must be donation of a sum of money - Held, yes - Whether where assessee donated certain sum of money to a contractor appointed under on agreement with Zila Parishad for construction of school building, assessee would be entitled to rebate under section 88 in respect of said sum of money - Held, yes FACTS The assessee entered into an agreement with the Zilla Parishad to donate necessary funds in order to construct a school building. A contractor, therefore, was appointed. The assessee was advancing, from time to time, various amounts to the contractor for the purpose of constructing the school building and in all, advanced Rs. 16,557. The assessee debited that amount to the school account. The Zilla Parishad, took possession of the building from the contractor and commenced the Girls High School in that building. The assessee claimed exemption of the said amount under section 88. The ITO as well as the AAC rejected the claim on ground that the donation was not made in cash which was essential for the application of section 88. On further appeal, the Tribunal held that in fact the donation was made in cash and, therefore, it squarely came within the purview of section 88 and further, that donation in kind was not precluded for the purpose of allowance of rebate under section 88. The Tribunal, consequently, allowed the appeal and granted rebate to the assessee on the said amount. On reference: HELD Even a casual reading of section 88 would indicate that in order to attract the provisions of section 88, what must have been paid is the sums. That word can only mean payment in cash. It can admit of no meaning which would include within its fold property or a thing also. Thus, a plain reading of the section would only mean that it is only in a case where any sum is paid by way of donation to a local authority that the assessee would be entitled to rebate. On the other hand, if he donates a building or a thing which may have money value, merely because that donation is in kind it cannot be brought within the fold of…

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