Law:

Section:

Section 80G [as it stood before 1-4-1976] of the income-tax act, 1961-Deductions-Donations to certain funds/charitable institutions, etc.-Assessee donated shares worth Rs. 1,70,000 to two charitable trusts and claimed deduction under section 80g on the ground that even donations in kind qualified for deduction-Whether assessee entitled to deduction claimed by it-Held, no Facts The assessee donated certain shares to two charitable trusts, and claimed deduction under section 80G. The ITO rejected the claim on the ground that shares and not money was donated and that donations in kind did not qualify for deduction under the section. The AAC held that donations in kind would also qualify for relief. This was confirmed by the Tribunal also. On reference: Held It is clear that the provisions of section 80G could be attracted only if the donation is in cash and not in kind. However, in order to decide whether a donation is in cash or in kind, one had to look to the substance of the donation and not merely to the form in which it was made. If, having regard to the substance of the transaction, it was essentially a donation in cash, the rebate under section 80G would be admissible. If it was a donation in kind, pure and simple, it would clearly fall outside the purview of section 80G. In the instant case throughout the submission before the authorities below had been on the premise that donation in kind also would qualify the assessee for rebate under section 80G. Therefore, it was not contended by the assessee before the authorities below that, in substance, the donation was in cash. This was, therefore, a case in which there had been a donation in kind, i.e., shares, and, therefore, the Tribunal was in error in holding that donation in kind would also qualify the assessee for rebate under section 80G. Case review CIT v. Associated Cement Co. Ltd. [1968] 68 ITR 478 (Bom.) explained and followed. CIT. v . Bangalore Woollen, Cotton & Silk Mills Co. Ltd. [1973] 91 ITR 166 (Mys.) and CIT v. Amonbolu Rajiah [1976] 102 ITR 403 (AP) followed . Editor's note 1. The High Court refused permission to the assessee to remand the case to the Tribunal with a view to giving the…

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