2015 (8) TMI 1460 - HC - Income Tax

Entitled for deduction u/S 80G - Held that - No deduction was allowed in respect of any donation unless such donation is a sum of money and since the assessee made donation in the form of equipments and not as a sum of money, such deduction was not permissible in law and which came to be challenged by the assessee in appeal before the Tribunal and after perusal of the records the Tribunal arrived to a conclusion that the money was paid to the manufacturer of those machines which were installed at the SMS Hospital with the prior consent and such machines were installed to provide medical assistance to the poor people and also observed that if the money would have been paid directly to the SMS Hospital donation u/S 80G was permissible but there was a confirmation in regard to machines being installed and paid by cheque to the manufacturer and machines once installed in SMS Hospital has been counter checked by the revenue, taking note thereof and the facts which came before the Tribunal into consideration allowed the appeal of the assessee & held that he is entitled for deduction u/S 80G of the Act. - decided in favour of assessee.

Summary

Issues:
Deduction claimed under Section 80G of the Income Tax Act, 1961.

Analysis:
The case involved an appeal under Section 260A of the Income Tax Act, 1961 against the order of the Income Tax Appellate Tribunal regarding the deduction claimed by the assessee under Section 80G of the Act. The assessee, engaged in the business of trading and export of readymade garments, had filed a return of income for the assessment year 2009-10 declaring a total income. The Assessing Officer allowed the deduction as claimed by the assessee in the computation of income. However, the controversy arose when the deduction claimed by the assessee in the form of various equipments/items to a medical relief society was disallowed by the learned CIT, citing Explanation-5 of Section 80G which required donations to be in the form of a sum of money. The assessee challenged this decision before the Tribunal, which found that the money was paid to the manufacturer of machines installed at a hospital to provide medical assistance to the poor. The Tribunal concluded that the assessee was entitled to the deduction under Section 80G as the machines were installed for charitable purposes, even though the donation was not in the form of money directly to the hospital.

The High Court, comprising Hon'ble Mr. Justice Ajay Rastogi and Hon'ble Mr. Justice Anupinder Singh Grewal, after hearing the counsel for both parties, found no substantial question of law requiring consideration in the appeal. Consequently, the appeal was dismissed. The judgment reaffirmed the Tribunal's decision allowing the deduction under Section 80G of the Income Tax Act, emphasizing the charitable purpose served by the installation of medical equipment at the hospital for providing assistance to the less privileged.