Case: H. H. Sri Rama Verma Vs. Commissioner of Income Tax, Ernakulam

2. The appellant is an assessee under the Income Tax Act, he donated equity shares of Nirlon Synthetic Fibres and Chemicals Ltd. having face value of Rs. 12, 50, 000 to each of two trusts, namely, H.H. Maharani Setu Parvati Bayi Trust and H.H. Princess Lakshmi Bayi Trust. The total donation, according to the assessee, amounted to Rs. 25, 00, 000. In the assessment yearthe assessee claimed exemption under Sectionof the Act in respect of the aforesaid donations made by him to Charitable Trusts. The Income Tax Officer rejected the claim. On appeal the Appellate Assistant Commissioner directed the Income Tax Officer to call for the relevant receipts and if satisfied with the admissibility of the deduction claimed to grant the deduction according to law. The revenue preferred appeal before the Appellate Tribunal. The Tribunal held that the expression "sums" occurring in Sectiondid not include any donation made in kind in the shape of share, it therefore set aside the order of the Appellate Assistant Commissioner. On reference, the High Court agreed with the view taken by the Tribunal. Hence this appeal

Reasoning: On a careful scrutiny of the two opinions, in the aforesaid judgments, we are in agreement with the view taken by the High Courts of Andhra Pradesh, Allahabad and Gujarat in holding that Sectioncontemplates cash amount of money as donation, for claiming relief of deduction and it does not refer to any donation made inAfter the insertion of the aforesaid Explanation, there cannot be any doubt that for purposes of claiming deduction only cash amount which may have been donated would be taken into account. No doubt this provision is not retrospective in nature nonetheless it indicates the legislative intent behind Sectionprior to its amendment8. We, therefore, agree with the view taken by the Kerala High Court.