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TMI Blog1973 (3) TMI 46X X X X Extracts X X X X X X X X Extracts X X X X ..... ding. A contractor, therefore, was appointed. The assessee was advancing from time to time various amounts to the contractor for the purpose of constructing the school building. The amounts were thus advanced between April 13 1964, and October 28, 1964. The total amount thus advanced came to Rs. 16,557. The assessee debited that amount to the school account. The Zilla Parishad, who was also the owner of the land, took possession of the building from the contractor and commenced the Girls High School in that building. The assessee claimed exemption from tax on the said amount under section 88 of the Income-tax Act, 1961. The Income-tax Officer as well as the Appellate Assistant Commissioner rejected the claim on the ground that the donati ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tury Dictionary, the word "sum" means a quantity of money. It can admit of no meaning which would include within its fold property or a thing also. Thus, a plain reading of the section would only mean that it is only in a case where any sum is paid by way of donation to a local authority that the assessee would be entitled to rebate. On the other hand, if he donates a building or a thing which may have money value, merely because that donation is in kind it cannot be brought within the fold of section 88. The conclusion of the Tribunal, therefore, that donation in kind is not precluded for the purpose of allowance of rebate in terms of section 88 of the Act cannot be said to be correct. It is contrary to the plain language of section 88. Th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... donations which take the shape of stock-in-trade as the only exception to the legal requirement of cash. If so the instant claim too is eligible by a slight extension of the same principle. The materials and labour have gone out of what otherwise would have gone into cost of production. The Appellate Assistant Commissioner's order is upheld." Before the learned judges of the Bombay High Court, it was contended that the manner in which the donation was given showed that it was not a sum of money which was paid by the assessee but the donation was of movable property, viz., the kiln. Characterising the said contention as technical in the extreme, the learned judges observed that if one were to look to the substance of the transaction, ther ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... , that in order that an assessee may be entitled to the rebate under section 15B in respect of 'sums paid as donations', the donations need not be in the shape of actual cash." With due respect to the author who gave that heading to that judgment, we are bound to say that it is misleading. The learned judges have not said anything of that kind. The judgment, on the other hand, on facts, found that it was cash which was donated and not a kiln. We do not, therefore, agree with the view taken by the Tribunal that even if it be taken that the donation was of the building itself after having been constructed by the assessee, the rebate would still be admissible. Our attention was drawn to an earlier order of the Income-tax Appellate Tribun ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... conclusion of the Tribunal that in the instant case what was donated was not the school building but was actually the money. When once it is found that the land on which the building was constructed belonged to the Zilla Parishad, then there would be no difficulty in holding that any accretion to the immovable property would be that of the Zilla Parishad. In this case it is not clear whether the contractor was appointed by the assessee or by the Zilla Parishad. If the Contractor was appointed by the Zilla Parishad, then the matter is very easy. The amount paid by the assessee to such contractor would amount to payment of the money to the Zilla Parishad itself because the contractor would be an agent of the Zilla Parishad. On the other ha ..... X X X X Extracts X X X X X X X X Extracts X X X X
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