FIRST INCOME TAX OFFICER v. GOGTE SALT & CHEMICALS
[Citation -1987-LL-0416-6]

Citation 1987-LL-0416-6
Appellant Name FIRST INCOME TAX OFFICER
Respondent Name GOGTE SALT & CHEMICALS
Court ITAT
Relevant Act Income-tax
Date of Order 16/04/1987
Assessment Year 1981-82
Judgment View Judgment
Keyword Tags gross total income
Bot Summary: This appeal by the revenue is directed against the order of the Commissioner allowing the deduction under s. 80G as claimed by the assessee in computing the total income for the assessment year 1981-82 corresponding to the previous year ended 31-12-1980. The assessee had made donation of Rs. 1,06,000. The total income of the assessee had been determined at Rs. 8,02,178. The Income-tax Officer granted a deduction of only Rs. 40,109 being 50 of 10 of the total income. CIT 1979 120 ITR 185 and held that the assessee was entitled to the deduction of 50 of the donation made, subject to a ceiling of 10 of the total income and since that was Rs. 80,217 the assessee was entitled to the deduction of Rs. 53,000 as claimed under s. 80G. It has been brought to our notice by the revenue that the section has since been amended by the substitution of sub-clause by the Finance Act of 1980 with effect from 1-4-1981 which provides that if the aggregate of the sums namely, the donations eligible for deduction, exceeds 10 of the gross total income, the amount by which the aggregate exceeds shall be ignored for the purpose of computing the deduction. The memorandum explaining this change clearly indicates that the amendment was brought to get over the decision of the Andhra Pradesh High Court and makes the intention clear that it is the donations that should not exceed 10 of the total income and not the amount of deduction. We reverse the order of the Commissioner and restore the order of the Income-tax Officer.


This appeal by revenue is directed against order of Commissioner (Appeals) allowing deduction under s. 80G as claimed by assessee in computing total income for assessment year 1981-82 corresponding to previous year ended 31-12-1980. assessee had made donation of Rs. 1,06,000. total income of assessee had been determined at Rs. 8,02,178. Income-tax Officer granted deduction of only Rs. 40,109 being 50% of 10% of total income. On appeal, Commissioner (Appeals) followed decision of Andhra Pradesh High Court in case of Hyderabad Race Club v. Addl. CIT [1979] 120 ITR 185 and held that assessee was entitled to deduction of 50% of donation made, subject to ceiling of 10% of total income and since that was Rs. 80,217 assessee was entitled to deduction of Rs. 53,000 as claimed under s. 80G. It has been brought to our notice by revenue that section has since been amended by substitution of sub-clause (iv) by Finance (No. 2) Act of 1980 with effect from 1-4-1981 which provides that if aggregate of sums namely, donations eligible for deduction, exceeds 10% of gross total income, amount by which aggregate exceeds shall be ignored for purpose of computing deduction. memorandum explaining this change clearly indicates that amendment was brought to get over decision of Andhra Pradesh High Court and makes intention clear that it is donations that should not exceed 10% of total income and not amount of deduction. In view of this statutory change, it is clear that computation made by Income-tax Officer was correct and relief granted by Commissioner (Appeals) without noticing change in law was incorrect. We, therefore, reverse order of Commissioner (Appeals) and restore order of Income-tax Officer. appeal is allowed. *** FIRST INCOME TAX OFFICER v. GOGTE SALT & CHEMICALS
Report Error