| Case ID |
2e55ea31-89b8-45e7-a3bc-e84ee6a363fc |
| Body |
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| Case Number |
IT REFERENCE CASE No. 9 OF 1970 |
| Decision Date |
Jun 14, 1972 |
| Hearing Date |
|
| Decision |
The court ruled in favor of the assessee, allowing the deduction of the donation made in kind. The court emphasized that the substance of the transaction should be considered, and the assessee is entitled to the deduction of Rs. 6,834 for the donated cloth. The ruling highlighted the importance of charitable donations and aimed to prevent undue hardship for businesses donating from their stock-in-trade. |
| Summary |
In the case of 'Commissioner of Income-tax v. Bangalore Woollen, Cotton and Silk Mills Co. Ltd.', the Mysore High Court addressed the eligibility of a donation made in kind for tax exemption under section 88 of the Income-tax Act, 1961. The assessee, a public limited company, donated cloth valued at Rs. 6,834 to charitable institutions during the accounting year 1964. Initially, the Income-tax Officer disallowed the claim, stating that the donation was made in kind rather than cash. However, the Appellate Assistant Commissioner and subsequently the Income-tax Appellate Tribunal ruled in favor of the assessee, citing a precedent from the Bombay High Court. The court acknowledged the cancellation of an earlier circular by the Central Board of Direct Taxes but maintained that the previous legal interpretation should prevail, emphasizing the need for a practical approach to donations made in kind. Ultimately, the court affirmed that the assessee was entitled to the deduction, reinforcing the value of charitable contributions and the need for a fair interpretation of tax laws. This decision has significant implications for businesses engaging in charitable activities, ensuring that donations made in kind are recognized for tax deduction purposes, thereby promoting corporate social responsibility. |
| Court |
Mysore High Court
|
| Entities Involved |
Commissioner of Income-tax,
Bangalore Woollen, Cotton and Silk Mills Co. Ltd.
|
| Judges |
G.K. Govinda Bhat,
K. Jagannatha Shetty
|
| Lawyers |
Sri Balakrishna
|
| Petitioners |
Commissioner of Income-tax, Mysore
|
| Respondents |
Bangalore Woollen, Cotton and Silk Mills Co. Ltd.
|
| Citations |
1973 SLD 647,
(1973) 91 ITR 166
|
| Other Citations |
Commissioner of Income-tax v. Associated Cement Co. Ltd. [1968] 68 ITR 478 (Bom.)
|
| Laws Involved |
Income-tax Act, 1961
|
| Sections |
256(1),
88
|