| Case ID |
231e3270-4c3f-4afc-be39-887390f9725f |
| Body |
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| Case Number |
IT REFERENCE No. 170 OF 1978 |
| Decision Date |
Jan 01, 1983 |
| Hearing Date |
Jan 01, 1983 |
| Decision |
The Gujarat High Court held that the donation of shares worth Rs. 1,70,000 to two charitable trusts did not qualify for deduction under section 80G of the Income-tax Act, 1961. The court ruled that the provisions of section 80G apply only to cash donations and not to donations in kind. The assessee's claim for a deduction was rejected as it was determined that the donation was made in kind (shares) rather than cash. The court emphasized the need to look at the substance of the transaction, confirming that the nature of the donation was critical in determining eligibility for tax relief. The court also noted that previous judicial interpretations allowing deductions for donations in kind were not applicable in this case, leading to the conclusion that the assessee was not entitled to the claimed deduction. |
| Summary |
In the landmark case before the Gujarat High Court, the issue of tax deductions for charitable donations was critically examined under section 80G of the Income-tax Act, 1961. The case centered on Smt. Dhirajben R. Amin's donation of shares valued at Rs. 1,70,000 to two charitable trusts. The Income Tax Officer (ITO) initially disallowed the deduction, asserting that the donation was in kind rather than cash, which contravened the stipulations of section 80G that only permitted deductions for cash donations. The appellate authorities, including the Appellate Assistant Commissioner (AAC) and the Tribunal, had previously allowed the deduction based on interpretations that donations in kind qualified for tax relief. However, the High Court firmly established that only cash donations are eligible for deductions under section 80G, stating that any donation in kind does not meet the statutory requirements. The court's ruling reiterated the necessity of examining the substance of transactions rather than mere appearances, thereby clarifying the legal landscape surrounding charitable donations and tax deductions in India. This case serves as a pivotal reference for future disputes regarding the nature of charitable contributions, emphasizing the importance of cash donations in availing tax benefits. The decision has implications for tax practitioners and taxpayers alike, highlighting the need for careful consideration of donation structures when seeking relief under tax law. |
| Court |
Gujarat High Court
|
| Entities Involved |
Not available
|
| Judges |
Ahmadi J.
|
| Lawyers |
Not available
|
| Petitioners |
Commissioner of Income Tax
|
| Respondents |
Smt. Dhirajben R. Amin
|
| Citations |
1983 SLD 885,
(1983) 141 ITR 875
|
| Other Citations |
CIT v. Associated Cement Co. Ltd. [1968] 68 ITR 478 (Bom.),
CIT v. Bangalore Woollen, Cotton & Silk Mills Co. Ltd. [1973] 91 ITR 166 (Mys.),
CIT v. Amonbolu Rajiah [1976] 102 ITR 403 (AP),
CIT v. Traub (India) P. Ltd. [1979] 118 ITR 525 (Bom.),
CIT v. Khandelwal Laboratories P. Ltd. [1979] 118 ITR 531 (Bom.),
Saurashtra Cement & Chemical Industries Ltd. v. CIT [1980] 123 ITR 669 (Guj.),
CIT v. Kartikey V. Sarabhai [1981] 131 ITR 42 (Guj.)
|
| Laws Involved |
Income-tax Act, 1961
|
| Sections |
80G
|