DEPUTY COMMISSIONER OF INCOME TAX Vs. ALARSIN MARKETING P LTD
LAWS(IT)-1994-10-22
INCOME TAX APPELLATE TRIBUNAL
Decided on October 14,1994

Appellant
VERSUS
Respondents

JUDGEMENT

Pradeep Parikh, Accountant Member - (1.) THE revenue is in appeal before us on the following two grounds : (i) On the facts and in the circumstances of the case and in law, the learned CIT(A) erred in directing to exclude the repairs and insurance expenses on motor car amounting to Rs. 21,233 for the purpose of aggregation under Section 37(3A). (ii) On the facts and in the circumstances of the case and in law, the learned CIT(A) erred in directing to grant deduction under Section 35(2A) in respect of donation of Rs. 8,00,000 to Swastiyog Pratisthan Charitable Trust overlooking the fact that the conditions prescribed in Section 35(1)(ii) are not fulfilled.
(2.) As regards ground No. (i), the assessee's case is fairly covered by the decision of the jurisdictional High Court in the case of CIT v. Chase Bright Steel Ltd. (No. 1) [1989] 177 ITR 124 (Bom.) and hence, no interference is called for. We, therefore, reject this ground. As regards ground No. (ii), the facts are that the assessee made donation of Rs. 8 lacs to Swasthi Yog Pratisthan Charitable Trust, Miraj (Maharashtra) towards a Scientific Research Programme approved by the Prescribed Authority, under Section 35(2A) of the Income-tax Act, 1961. The said programme was approved for a period of five years from 6-2-1981 to 5-2-1986 by Notification dated 27-3-1981. At the time when the said programme was approved, the trust was also recognised under Section 35(1)(ii) of the Act vide Notification No. 3409, dated 26-5-1980. However, when the donation was actually made, i.e., Rs. 6 lacs on 7-2-1984 and Rs. 2 lacs on 24-2-1984, recognition under Section 35(1)(ii) given to the trust had lapsed. The Assessing Officer disallowed the claim of the assessee for weighted deduction under Section 35(2A) on the ground that when the donation was actually made, the trust had lost its recognition under Section 35(1)(ii) of the Act.
(3.) SRI D.K. Singh, the learned Departmental Representative, vehemently argued for the revenue that in order to avail of the weighted deduction of 133 1/3 per cent under Section 35(2A) of the Act, it was imperative that the donee should have recognition under Section 35(1)(ii) of the Act, because that is a pre-condition contemplated in Section 35(2A) of the Act. He further argued that the words "or other institution referred to in Clause (ii) of Sub-section (1)" qualify not only the main part of Section 35(1)(ii) but also qualify the proviso to Section 35(1)(ii) of the Act. He further relied on the circular of the Board giving guidelines for the approval of such research programmes, wherein it is mentioned at Column 5.3 that the institutions where the scientific research programmes are proposed to be executed, the number and date of the Government Notification under which the institution is approved under Section 35(1)(ii), should be given. He also pointed out that the Notification granting approval under Section 35(2A) of the Act mentions the fact that the trust is approved under Section 35(1)(ii) of the Act. All these clearly go to show that in order to claim weighted deduction, it is necessary that the donee-institution is recognised under Section 35(1)(ii) of the Act as well. The Ld. Departmental Representative further stated that it is not sufficient that the institution should have recognition under Section 35(1)(�i) only when the programme is approved under Section 35(2A) of the Act, but it is also necessary that at the time of making donation under Section 35(2A) of the Act, the Trust should have recognition under Section 35(1)(ii) as mentioned in the proviso to Section 35(1)(ii) of the Act.;


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