Kantilal P. Shah vs Commissioner of Income Tax

G.T. Nanavati, J.—The following two questions are referred to this Court by the Tribunal under s. 256(1) of the IT ACT, 1961 :

"1. Whether, on the facts and in the circumstances of the case, the Tribunal was right in law in holding that donation of land in the instant case was not even in substance a cash donation ?

If question No. 1 is answered in the affirmative, and against the assessee, whether on the facts and in the circumstances of the case, the assessee is entitled to relief under s. 80G of the IT Act ?"

The point which arises for consideration as a result of these questions is covered by the decision of the Supreme Court in H.H. Sri Rama Verma Vs. Commissioner of Income Tax, Ernakulam, . In that case it is held :

"The language used in s. 80G(2) of the IT Act, 1961 is clear and unambiguous. On a plain reading of the section, it is apparent that an assessee is entitled to claim deduction from his income on the amount of money paid by him as donation to the authorities and for the causes specified therein. The context in which the expression ''sums paid by the assessee'' 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, and the income relates to the amount of money earned or received by an assessee. Therefore, for purposes of claiming deduction under s. 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 scope of s. 80G(2)(a) and will not entitle an assessee to deduction. Donation of shares of a company does not amount to payment of any amount though the shares, on their sale, may be converted into money, and the donation so made does not fall within the ambit of s. 80G(2)(a) is plain and clear, it is not open to the Courts to enlarge the scope by its interpretative process founded on the basis of the object and purpose underlying the provision for granting relief to an assessee."

In view of this decision of the Supreme Court, question No. 1 is answered in the affirmative and question No. 2 is answered in the negative, that is, against the assessee and in favour of the Revenue. No order as to costs.