Commissioner of Income Tax vs Gaj Singh

V.K. Singhal, J.—The Income Tax Appellate Tribunal has referred the following question of law arising out of its order dated May 6, 1982, in respect of the assessment year 1971-72 u/s 256(1) of the Income Tax Act, 1961 :

"Whether, on the facts and in the circumstances of the case, the Tribunal was justified in holding that the assessee was entitled for deduction u/s 80G of the Income Tax Act in respect of donations made in kind and in directing the Income Tax Officer to allow the same ?"

The brief facts of the case are that Gaj Singh, ex-Ruler of Jodhpur, had made donation in kind of certain immovable properties to charitable and religious trusts and claimed deduction u/s 80G of the Income Tax Act in respect of the value thereof as donations. The Income Tax Officer disallowed the deduction u/s 80G of the Income Tax Act as in respect of the donation made in kind the deduction was not allowable and only the cash donation was allowable. The Commissioner of Income Tax (Appeals), however, allowed the claim of the assessee and the order of the Commissioner of Income Tax (Appeals) was confirmed by the Income Tax Appellate Tribunal. There was conflict of opinion in different High Courts on the interpretation of Section 80G. In the cases of Commissioner of Income Tax, Bombay City I Vs. Associated Cement Co. Ltd., CIT (Addl) v. Abhai Maligai [1978] 113 ITR 737 and Commissioner of Income Tax, Mysore Vs. Banglore Woollen, Cotton and Silk Mills Co. Ltd., the courts have decided the matter in favour of the assessee while in the cases Commissioner of Income Tax Vs. Gopal Krishna Singhania, Commissioner of Income Tax Vs. Amonbolu Rajiah, and Commissioner of Income Tax, Gujarat Vs. Dhirajben R. Amin, the other High Courts have taken the view in favour of the Revenue. The matter has now been settled by the decision of the apex court in the case of H.H. Sri Rama Verma Vs. Commissioner of Income Tax, Ernakulam, wherein it was held that as Section 80G(2)(a) contemplates only cash amount of money as donation and it does not refer to any donation made in kind. In the light of the decision of the apex court in the case of H.H. Sri Rama Verma Vs. Commissioner of Income Tax, Ernakulam, we are of the opinion that the Tribunal was not justified in holding that the assessee was entitled for deduction u/s 80G of the Income Tax Act in respect of the donations made in kind.

Consequently, the reference is answered in favour of the Revenue and against the assessee.